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Employment Update: Employment law in 2012 - a look ahead


United Kingdom

Employment Update: Employment law in 2012 - a look ahead

Employment law in 2012 - a look ahead

2012 looks set to be a busy year for HR practitioners and employment lawyers. Here are some key dates for your diaries:


  • New tribunal award limits will come into force on 1 February. The maximum compensatory award for unfair dismissal will increase from £68,400 to £72,300 and the limit on the maximum amount of a week's pay for the purposes of calculating statutory redundancy pay or the basic award for unfair dismissal will increase from £400 to £430.


  • Statutory sick pay will increase from £81.60 to £85.85 and statutory maternity, paternity, additional paternity and adoption pay will increase from £128.73 to £135.45.
  • The qualifying period for unfair dismissal is due to double from one to two years on 6 April. 
  • In its recent response to the 'Resolving Workplace Disputes' consultation, the Government indicated that a range of changes are intended to have effect from April (including the increase in the limit for deposit orders from £500 to £1,000 and the increase in the maximum cost award from £10,000 to £20,000).


  • The National Minimum Wage is likely to increase (subject to the Low Pay Commission's review, which is expected by the end of February).
  • Compulsory pensions will be introduced from October. The date on which compulsory pensions first applies is known as the employer’s “Staging Date”.


Other notable changes for 2012 (no firm dates announced)

  • Early conciliation through ACAS
  • The introduction of "compensated no fault dismissals" for micro-firms and a consultation on the introduction of "protected conversations" 
  • Financial penalties for employers who breach employment rights
  • Consideration of “rapid resolution” scheme, to provide quicker, cheaper, determinations in low value, straightforward claims
  • Consultation on proposals to clarify compromise agreements
  • Potential reduction of the 90 day minimum consultation period for collective redundancies and potential simplification of TUPE (the Government has called for evidence on both issues and the deadline for responses is 31 January 2012)

Requirement to sign opt out agreement

The Employment Appeal Tribunal (EAT) has confirmed that an employee had not been subject to a detriment when he was required to sign an opt out agreement in order to work overtime. The EAT's decision provides some clarification for employers about the relationship between overtime and opt out agreements.

In Arriva London South Ltd v Nicolaou, Mr Nicolaou was employed by Arriva as a bus driver. After the Working Time Regulations 1998 (WTR) were implemented, the employer introduced a policy whereby no working rest days were to be offered to drivers who had not signed an opt out from the 48 hour working week. This policy was not followed and Mr Nicolaou, who had not signed an opt out form, regularly worked overtime on rest days. Following an audit, it was noticed that the policy was not being enforced and it was re-implemented by a notice to all drivers. Mr Nicolaou claimed that he was being denied the opportunity to work overtime and this subjected him to a detriment, under s.45A of the Employment Rights Act 1996, for having exercised his right not to opt out under the WTR.

The Employment Tribunal confirmed that Mr Nicolaou had been subjected to a detriment caused by his failure to sign the opt out. It also found that Arriva's policy was reasonable in the circumstances, but this was relevant to quantum and not liability. Arriva appealed.

The EAT allowed Arriva's appeal and dismissed the claim. It said that the protection under s.45A is akin to protection from victimisation and the tribunal should have referred to the principles established by discrimination case law. The key question is why Mr Nicolaou received the treatment complained of. The correct approach, adopted in a recent whistleblowing case, is that liability arises if the protected act is a material factor in the employer's decision to subject the claimant to a detrimental act.

In this case, the EAT agreed that Arriva withdrew rest day working in order to enforce its policy, which was reasonable and necessary to ensure compliance with the employer's statutory duty under the WTR (to ensure that the 48 hour weekly limit on working time is complied with). That aim could properly be separated from the underlying refusal by Mr Nicolaou to sign the opt out agreement. The necessary link between Mr Nicolaou's protected act and the treatment complained of had not been established in this case, regardless of whether the withdrawal of overtime working amounted to a detriment from Mr Nicolaou's viewpoint.

Employers will also welcome the EAT's additional comment that this result accords with good sense and resolves what was a possible tension between the employer's statutory duty to ensure compliance with the 48 hour limit and the protection to employees afforded by s.45A. The EAT also notes that it would be a strange result if this employer were to be condemned for adopting a reasonable policy designed to ensure that its employees who exercised their right not to opt out of the 48 hour week maintained that right.

TUPE – identifying a service provision change

The EAT has confirmed that there was no service provision change under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) given the change in activities between the outgoing and incoming contractors and the fragmentation of service providers. This decision provides further guidance on what will, and will not, constitute a service provision change. It is also a useful reminder of the principles that should be considered by a tribunal when establishing whether a service provision change falls within TUPE.

In Enterprise Management Services Ltd v Connect-Up Ltd and others, Enterprise provided IT support services to Leeds City Council (LCC) schools under the terms of a framework agreement. It initially provided services to all the LCC schools but by 2008/2009 this had dropped to 80%. When the framework agreement expired, LCC invited tenders for a new agreement. Enterprise decided not to tender and the contract was awarded to Connect from 1 April 2009. There were significant differences between the two framework agreements, the most significant being that the new proposed contract excluded any service cover providing for curriculum systems. This represented 15% of the work which had previously been carried out by Enterprise staff.

On 31 March 2009, Enterprise dismissed employees but not on the ground of redundancy. There was some confusion as to the transfer position. Enterprise believed that the employees' employment transferred to Connect. Following 1 April 2009, there was something of a 'free for all' and Connect lost around 40% of the schools previously serviced by Enterprise to other providers.

The Employment Tribunal held that no transfer had taken place. Enterprise appealed but the EAT dismissed the appeal. It was satisfied that the Employment Judge was entitled to conclude, as a matter of fact and degree, that the omission of curriculum work, representing 15% of the work done by Enterprise employees, meant that the activities carried out by Connect were not essentially or fundamentally the same as those carried on by Enterprise. The EAT also stated that the Employment Judge was entitled to conclude that post-1 April, the provision of services formerly provided by Enterprise were so spread amongst other providers, as well as Connect, that no service provision change had taken place.

As the case law on service provision changes has developed over recent years, the EAT listed the following principles which should be applied by tribunals when considering service provision changes:

  • The expression "activities" is not defined in TUPE. The first task is to identify the relevant activities carried out by the original contractor.
  • The next question is whether the activities carried on by the subsequent contractor after the relevant date are fundamentally or essentially the same as those carried on by the original contractor. Minor differences may be disregarded. This is essentially a question of fact and degree.
  • Where there is a division of services after the relevant date amongst a number of different contractors (i.e. fragmentation), the case falls outside the service provision change regime.
  • Even where the activities remain essentially the same before and after the transfer date, a service provision change will only take place if other conditions are satisfied (including that there is an organised grouping of employees in Great Britain which has as its principal purpose the carrying out of the activities on behalf of the client).

France/Belgium - overseas secondments

Please click here to read a recent article on the termination of overseas secondments (published by Kluwer), written by Stefan Nerinckx, a partner in our Brussels office, and Laurent Guardelli, a partner in our Paris office.

Employment Law Blog

Our Employment Law Blog has been busy recently. You can also follow us on Twitter, @FieldfisherHR_Law, and find us on LinkedIn. Here is a taster of some of the recent topics we have covered:

For further information, please contact Louise Fernandes-Owen, Senior Associate (PSL) or Richard Kenyon, Partner at Field Fisher Waterhouse LLP

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