The Employment Right (Increase of Limits) Order 2010
The Employment Rights (Increase of Limits) Order 2010 (ERO) increases the financial limits for various tribunal awards from 1st February 2011 which will impact on the financial limits awarded in an unfair dismissal claim.
The compensation awarded to an employee who successfully brings a claim for unfair dismissal is split between a Basic and Compensatory Award both of which are being affected by the ERO.
The ERO will increase the maximum weekly amount that an employee can claim in reference to a week’s pay from the current £380 to £400. The Basic Award incorporates this figure into its calculation (continuous service x age x week’s pay). In addition to this increase, the ERO also increases the amount of Compensatory Award that may be awarded from the current £65,300 to £68,400.
Additional Paternity Leave Regulations to be introduced
The Regulations give new fathers the right to take additional paternity leave during the second six months of their child’s life if the mother chooses to return to work with maternity leave outstanding at which point the father will have the main responsibility for caring for the child. Some of the father’s leave may be paid if it is taken during the mother’s 39-week maternity pay period. The period of leave must be continuous; the minimum allowed will be two weeks and the maximum 26 weeks.
The new rights will apply to the parents of children due to be born on or after 3 April 2011
End to the default retirement age (DRA)
The Government has announced that as of 6th April 2011 the DRA will no longer apply. Until such date however, employers may compulsilory retire an employee who turns 65 before this date but notice of the intention to retire must be given to the employee before 5th April 2011 so that the retirement is due to take place before 1st October 2011. Employers must ensure that the appropriate procedure is followed if compulsory retiring an employee.
For any employees who reach the age of 65 on or after 6th April 2011 the employer cannot rely on the DRA and must objectively justify any contractual retirement age. Consensual retirement may become the norm.
As a result of the abolition of the DRA the Government has announced that retirement will be removed as a potentially fair reason for dismissal. The Government is yet to publish their draft legislation but we will keep you updated as to any changes that will be implemented.