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What are the key employment law changes in 2013?

What are the key employment law changes in 2013?

This issue, just to break with tradition, we leave aside the human conflicts and make sure you kick off this year informed of ten important changes regarding employment law in 2013. It's not quite The Ten Commandments – but they could keep your business on the straight and narrow.

The changes:

  • Enterprise and Regulatory Reform Bill is implemented – Vince Cable has driven through a comprehensive Enterprise and Regulatory Reform Bill which goes right to the heart of the employment tribunal system. The bill covers a comprehensive set of new requirements and processes amongst which it will permit employers to have a "protected conversation" with an employee with a view to terminating their employment under a settlement agreement. It's innovative and also allows the secretary of state to change the limit on the unfair dismissal compensatory award. 
  • New tribunal award limits come into force – This is something which will really hit home to smaller employers and struggling businesses. You'll need to be aware that there's going to be an increase in the limit on the amount of the compensatory award for unfair dismissal. The limit on the amount of the compensatory award for unfair dismissal increases from £72,300 to £74,200. This and other changes through the Employment Rights (Increase of Limits) Order 2012 (SI 2012/3007) come into effect on 1st February 2013.
  • Employee-shareholder contracts are introduced – This is yet another highly innovative idea designed to create a more inter connected and committed workforce. Under this scheme, the government is introducing a new type of employment contract whereby employees will be given shares, in exchange for waiving certain employment rights. The shares will be exempt from capital gains tax, up to a maximum threshold of £50,000. It could be a great way of giving employees a feel of what it's like to be a stakeholder rather than just a worker.  
  • Unpaid parental leave increases to 18 weeks – Bringing up baby is made even easier for the Y Generation because from 8th March 2013, the right to claim unpaid parental leave increases dramatically from 13 weeks to 18 weeks.
  • DBS checks (formerly CRB checks) are portable – The areas of security and the threat of negligent employment is being greatly tightened up in a new move under which the Disclosure and Barring Service DBS checks that employers are obliged to make (formerly Criminal Records Bureau CRB checks), are now portable between employers. From March 2013 an employee will not have to have a new check every time he or she starts a new job. As much as anything else, it could bring down the cost of continual checking and reduce the threats of legal actions through wrongful employment.  
  • Collective consultation period is reduced to 45 days – Much has been written of the greater flexibility of employment practice in the UK compared to the rest of Europe and this new initiative looks set to make things even less restrictive. From 6th April 2013, the old 90-day consultation period for when 100 or more redundancies were proposed has been halved to just 45 days.  
  • Real-time information for payroll – Real-time information is a new method of reporting deductions which requires employers to report deductions prior to, or at the time of, paying staff – rather than once a year. So, at the time of writing, from 6th April, employers are required to use real-time information to report payroll deductions before or when they make them.  
  • Statutory maternity, paternity, adoption pay increase – Coming soon is an increase in the standard rates of statutory maternity, paternity and adoption pay. So, from 7th April 2013, the standard rate of statutory maternity, paternity and adoption pay will increase from £135.45 to £136.78 per week.
  • Rate of statutory sick pay increases – The standard rate of statutory sick pay increases from £85.85 to £86.70 per week.  
  • Fee for bringing employment tribunal claim imposed – The government has decreed that people using employment tribunals contribute to the cost of running the system where they can afford to do so, rather than the full cost being met by the taxpayer. This is to encourage people to look for alternatives, such as mediation, before going to the employment tribunal. To this end, the Government is implementing the charging of a fee in employment tribunals, under which the claimant has to pay an initial fee to issue a claim and a further fee if the claim proceeds to a hearing. This comes into effect in summer 2013.


There are always further employment law developments in the pipeline, but these confirmed key ten however will be sure to keep you covered for the time being. Government department websites usually contain useful summaries of recent and forthcoming legislation which will keep you on informed and in the know.