UK: Red tape day - employment law changes April 2011

Key employment law changes coming into force in early April 2011 have been announced:

• Retirement: last chance to act tomorrow
• New paternity rights
• Equality Act: positive action and statutory codes
• Employment tax changes
• Statutory rates
• Changes not going ahead

Retirement: last chance to act tomorrow

Any employer wishing to retire an employee turning 65 (or a higher normal retirement age) on or before 30 September 2011 without the risk of age discrimination needs to issue a notice of intended retirement (taking effect within the next 12 months) by 5 April 2011 at the latest. Any notice of retirement issued after that date will not fall within the current regime and the retirement will be unlawful unless justified. See our ebulletin for further details.

New paternity rights

Fathers of babies due on or after 3 April 2011 are entitled to up to six months’ additional paternity leave to be taken prior to the child’s first birthday and the transfer from the mother of up to three months’ pay at the statutory flat rate. Similar rights apply on adoption.

Leave cannot start earlier than 20 weeks after the birth (unless the mother has died) and 8 weeks' notice is required, so employers may start receiving requests around the end of June 2011.

Employers should update family-friendly policies and ensure managers are aware of the new rights. Those that provide enhanced pay or benefits to employees on maternity leave need to consider whether to extend these to employees on additional paternity leave.

A more detailed briefing on the new paternity rights and a table summarising the current position on all family-friendly rights is available to clients on request.

Equality Act: positive action and statutory codes

The positive action provisions in the Equality Act 2010 will come into force on 6 April 2011.  They are voluntary and unlikely to be much used given the difficulty of knowing when two candidates are "equally qualified" so that the one with a protected characteristic can be preferred.

The Equality and Human Rights Commission's statutory Codes will also come into force on 6 April 2011, replacing the current Codes on pre-Equality Act discrimination legislation.

The 2011 Budget confirmed that the dual discrimination rules in the Act will not be brought into force at all (although note that some dual discrimination claims have succeeded under the current law without these express provisions).  There will also be a consultation on removing the third party harassment provisions.

Employment tax changes

From 6 April 2011 employers must use the 0T tax code for payments to ex-employees following issue of the P45. This reduces the cash-flow benefit to employees in making the payments post-P45.

Higher rate taxpayers joining an employer-supported childcare scheme on or after 6 April 2011 will only receive relief at basic rate.

Statutory rates

From 3 April 2011, statutory maternity, paternity and adoption pay increases from £124.88 to £128.73 per week. Statutory sick pay increases from £79.15 to £81.60 per week. The weekly earnings threshold rises from £97 to £102.

Changes not going ahead

The right to request flexible work was due to be extended to parents of 17 year olds with effect from 6 April 2011. The government has since announced that it is not going ahead with this change and the relevant regulations will be repealed.

Employees of larger employers (with at least 250 employees) have the right to make a request for time off to undertake study or training. This was originally going to be extended to smaller employers on 6 April 2011, but again this decision has been reversed and the government has announced that the right will not be extended.

The Budget 2011 also announced that start-ups and employers of fewer than 10 employees are to be exempted from new employment laws for three years from 1 April 2011.