Regulation and rate changes October 2013

Regulation and rate changes October 2013

Most new regulations affecting businesses come into force on ‘common commencement dates’ in April and October each year.

The Government’s commitment to reducing the regulatory burden on businesses is being enforced with three key ideas:

1. One-in-One-Out
Departments and ministers have to justify any increases in the cost of regulation by finding savings of at least equal value.

2. One-in-Two-Out
An extension of One-in-One-Out, where measures that increase the cost of regulation have to be offset by deregulatory measures that are at least twice as valuable.

3. The Red Tape Challenge
Launched in April 2011, the Red Tape Challenge gives businesses and the public the chance to have their say on some 6,500 regulations, with the aim of improving or scrapping unnecessary red tape.

Here’s a summary of some recent changes that may affect you and your business, as well as regulations that are due to come into force in October 2013.

Employment tribunal fees
Workers in the UK who bring claims to Employment Tribunals, or make appeals to the Employment Appeal Tribunal, will now be charged to do so under changes in effect from 29 July 2013.

Claimants will be charged:
• between £160 to £250 to lodge a claim
• between £230 to £950 if the case goes ahead to a tribunal hearing.

Claimants submitting claims in groups on the same application have access to a cheaper fee structure if they choose to split the fee between them.

At the Employment Appeal Tribunal stage, claimants will be charged:
• £400 to lodge an appeal
• £1,200 for a full hearing.

In some instances, claimants who are unable to pay the charges may be able to apply to have tribunal fees reduced or waived.

Unfair dismissal compensation cap
Compensation payments for individuals who win unfair dismissal claims will now be capped, under changes that came into force on 29 July 2013.

Claimants who win their case will still be awarded the first part of compensation calculated on their age, length of service and weekly pay.

However, the second part of compensation, which is calculated on the employee’s financial loss (both past and future) as a result of dismissal – including benefits, such as a loss of pension – will be capped. The claimant will continue to receive the maximum £74,200 or, under the new rules, 52 weeks’ pay – whichever is the lower.

‘Shares for rights’ employee contracts
As of 1 September 2013, employees can choose a new employment status allows them to waive certain employment rights in exchange for shares in their employer’s company.

Employees cannot be forced into ‘shareholder’ status and they must be given – rather than purchase – a minimum of £2,000 worth of shares in their employer’s company. In a bid to boost take-up of the scheme, employee shareholders can take advantage of capital gains exemptions on gains made from the sale of shares worth up to £50,000.

Employees still retain, among other employment rights, the right to claim sick pay, maternity leave, time off for emergencies and paid annual leave. But they will forfeit:
• Most unfair dismissal rights
• The right to statutory redundancy pay
• Flexible working rights – except for in the two week period after a return from parental leave
• Certain statutory rights to request time off to train.

From October 2013:

National minimum wage (NMW)
The NMW rates will increase from 1 October 2013:
• the adult rate (21 years plus) will increase by 12p to £6.31 an hour
• the 18-20 year old rate will increase by 5p to £5.03 an hour
• the 16-17 year old rate will increase by 4p to £3.72 an hour
• the apprentice rate will increase by 3p to £2.68 an hour.

NMW ‘naming and shaming’ scheme
Employers who break NMW rules are liable to be ‘named and shamed’ under an existing Department for Business, Innovation and Skills scheme. Prior to 1 October 2013, they had to owe at least £2,000 to workers – and owe an average £500 per worker – before being named….

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