Unsurprisingly, there are a lot of changes to employment law and
statutory payment increases being enforced throughout the year. Ones to take
note of in February include a rise in statutory redundancy pay which from 1st
February goes up to £450 a week. This figure is used to calculate a week’s
redundancy pay if employees earn more than that amount a week.
The statutory guarantee payment for lay-off also increases to
£24.20 a day. There is also an interesting and controversial new contract
between an employer and an employee coming into force in April 2013. These are
called ‘employee-owner contracts’. The Government opened a consultation to
these contracts and a mighty 92% of respondents were negative or neutral
towards it, so you may be forgiven for wondering why the Government decided to
proceed. In an ‘employee-owner contract’, an employee receives company shares
in exchange for waiving certain employment rights.
These ‘certain employment rights’ that employees will be giving up
will include rights surrounding unfair dismissal, redundancy pay and the right
to request flexible working. If a mother wants to return to work from maternity
leave, she’ll have to provide 16 weeks’ notice instead of the usual eight under
the employee-owner contract.
Chancellor George Osborne announced that companies of any size
will be able to use this kind of contract but it has been principally intended
for SMEs. We do question why you would want to give away part of your company
to a brand new, unproven employee for very little protection when
discrimination claims can still be made. This new contract shouldn’t be viewed
as a way for rogue employers to mistreat their employees. We’ll report on this
more in due course as we are still waiting to see the draft contracts that are
yet to be issued!
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