Repeal of the Statutory Dismissal Procedures

As we stated in our last issue, the effect of new legislation is that from 6 April 2009 the statutory dismissal and disciplinary procedures will be repealed (see Employment Law Update February 2009).

However, it is important to consider the following:

The timing of a dismissal is crucial to the procedures which govern it. If the action (a step 1 letter, step 2 meeting or dismissal itself) occurs before 6 April 2009 the old rules will still apply. If the action occurs after 6 April 2009 the old rules are abolished and we’re back to the pre-2004 position.  This has made life interesting since 6 April 2009 to say the very least and will continue to do so.

The position is similar with the abolition of grievance procedures where the action occurred wholly before 6 April 2009. However, where the action began before 6 April 2009 and continues after that date the following should be noted:

• For claims relating to equal pay, redundancy payments and some other industrial claims, the previous statutory grievance procedures apply if the action occurs by 4 October 2009.
• For all other types of claim the same applies except that the cut off date is 4 July 2009.

Increase in redundancy payments – but when?

Alastair Darling, Chancellor of the Exchequer, produced a welcome seedling from his little red briefcase in the most recent budget:

• Maximum weekly statutory redundancy payment will increase from £350 to £380.

Accordingly, this increases the annual maximum from £10,500 to £11,400.

However, Mr Darling helpfully remained silent on when this increase would take effect and whether the unfair dismissal basic award maximum would also increase.

Shareholders as employees of the company

In the case of BERR v Neufeld & Anor CA, the Court of Appeal held that a shareholder and a director of a company can also be classified as employees for the benefit of receiving statutory payments from the National Insurance Fund if the company becomes insolvent.

The test to distinguish whether a shareholder or director can be an employee is an objective one for the court or tribunal to decide. The main factor to be considered will be whether the contract is considered a sham. Where no clear documents establish an employment relationship, relevant considerations would be:

1. The method of payment; and

2. The capacity in which the supposed employee does the work.

Flexible working time for certain employees

The Flexible Working (Eligibility, Complaints and Remedies) (Amendment) Regulations 2009 extends the right to request flexible working to employees with children under the age of 17. Both employers and employees should be aware of this.