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The Federation of Small Businesses has warned that awareness of the new laws which comes into force on October 1 and affects Britain's 1.2 million employers is 'worryingly low'.
It has claimed that one of the most significant changes that employers have faced in the last ten years, namely the new dismissal procedure, has not been accompanied by a large scale awareness campaign. In comparison the new disability regulations that come into effect on the same day have been widely promoted.
Dismissal procedure
From 1 October a new three step procedure will have to be followed in the event of a dismissal, disciplinary action or grievance in the workplace.
The FSB said that the procedures themselves seem straightforward but they will fundamentally change the way that employment issues are handled in the workplace. Turning custom and practice on its head, employers will be prevented from speaking to someone as a first step and instead will have to 'put the reasons for the disciplinary action or dismissal in writing, in broad terms to the employee' and arrange a 'face-to-face meeting'. As a result the procedure will be formalised at a much earlier stage risking early conflict.
Employment Lawyer Murray Fairclough who runs the FSB’s 24 hour legal advice line said: "The rules represent the most significant piece of employment legislation in the last decade, affecting the way in which almost all employee dismissals and grievances are handled in the workplace.
"Unwary employers could easily find themselves falling foul of the rules. They don’t just apply to conduct and capability dismissals but also to redundancies, long-term incapacity dismissals, expiry of fixed term contracts and retirements. In addition they apply from day one and so still need to be followed when dismissing an unsuitable probationer.
"If the employer fails to follow the procedure, the dismissal becomes automatically unfair, and any additional compensation can be increased by up to 50 per cent."
Expiry of fixed term contracts
In an interview with Shout99, Murray Fairclough expanded the comments he'd made relating to 'expiry of fixed term contracts' and their relevance to the freelancer community.
He explained that this would apply to those contractors who are classified as 'employees' and ultimately that is a decision for a tribunal.
He said: "If someone was put on a fixed term contract, for example for two years, and is then terminated, and they believe they were 'employed' then they could seek to have this law apply."
However, as most freelancers seek to move away from employee-like status and conditions in order to operate outside IR35, it is more likely to be of relevance in circumstances where self-employment has been foisted on an individual, rather than where an individual has set up his or her own company in order and actively operates in a business-to-business arrangement.
Red Tape Day
The new rules coming into force on October 1 include:
- Dispute resolution regulations, establishing new statutory minimum dismissal, disciplinary and grievance procedures.
- A revised version of the Acas code of practice for disciplinary and grievance procedures.
- Amendments to the Disability Discrimination Act 1995, providing a new definition of direct discrimination and widening the duty to make reasonable adjustments to workplaces for disabled people to include small businesses.
- Changes to the rules of procedure on equal pay for work of equal value claims in employment tribunals.
- New rules for awarding costs, fixing conciliation periods and introducing new claim and response forms in employment tribunals
- Changes to minimum wage regulations, replacing the system of fair estimate agreements for workers paid per task performed with a new system called 'rated output work'.
- An increase to the hourly minimum wage rate to £4.85 for adults, an increase to £4.10 per hour for 18 to 21-year-olds, and the introduction of a £3 hourly rate for those aged 16 and 17.
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Susie Hughes © Shout99.com 2004
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