May 2022 FAQs

May FAQs

Find out the answers to May’s HR FAQs by reading our latest blog. If you need further guidance please reach out to the team.

By how much can a tribunal increase an unfair dismissal award where an employer refuses to comply with an order for re-engagement or reinstatement?

A dismissed employee who has won a claim for unfair dismissal and, as a result, obtained an order for reinstatement or re-engagement will be entitled as part of that order to receive a compensatory award equivalent to the pay and benefits that they would have received, had there been no dismissal, between the date of their termination and the date of re-employment or reinstatement ordered by the tribunal. The normal statutory cap on the compensatory award (currently £93,878 or 52 weeks’ pay if this is lower) is not applicable in these circumstances. The employee will also be entitled to a basic award, which is calculated in accordance with a fixed formula.

If the employer subsequently refuses to re-engage or reinstate the individual, they will be entitled to an additional award of compensation over and above the basic and compensatory awards. The additional award is between 26 and 52 weeks’ pay, with a “week’s pay” currently capped at £571. In these circumstances, the normal statutory cap on the compensatory award will be disapplied to the extent necessary to enable the combined amount of the compensatory and additional awards to reflect fully the value of the pay and benefits lost during the period between the dismissal and the date that the employee should have been re-engaged or reinstated. The additional award will be made unless the employer can show that it was not practicable for it to comply with the re-engagement or reinstatement order.

What is the unfair dismissal compensatory award?

The compensatory award is such amount as the tribunal considers just and equitable in all the circumstances, having regard to the loss sustained by the applicant in consequence of the dismissal insofar as that loss is attributable to action taken by the employer. It includes, for example, loss of wages from the date of termination until the date of the hearing, loss of benefits in kind and loss of future earnings.

The maximum compensatory award is £93,878 where the effective date of termination is on or after 6 April 2022. There is an additional cap of 52 times the claimant’s weekly pay, which will apply if this is lower than the overall cap of £93,878. No maximum applies, however, where a person is regarded as unfairly dismissed for one of a number of reasons related to health and safety or for making a protected disclosure.

What is the unfair dismissal basic award?

Where a tribunal makes an award of compensation for unfair dismissal the award will consist of a basic award and a compensatory award. The basic award is calculated according to age, length of service and normal weekly pay in the same way as a statutory redundancy payment. For these purposes, where the effective date of termination is on or after 6 April 2022, the maximum amount of a week’s pay is £571.

A minimum basic award of £6,959 is payable where the employee was dismissed on grounds of trade union membership or activities, for carrying out legitimate health and safety activities as a health and safety representative, for carrying out functions as an occupational pension scheme trustee or for carrying out functions as an elected employee representative.

How much of an insolvent employer’s debt will the Secretary of State repay to employees?

An employee who is owed money by an insolvent employer can make a claim to the Secretary of State (in practice the Redundancy Payments Service) for payment of all or part of the debt out of the National Insurance Fund.

The Secretary of State’s liability extends to:

  • unpaid wages to a limit of £571 per week for a maximum of eight weeks;
  • up to six weeks’ holiday pay subject to a limit of £571 per week;
  • any basic award of compensation for unfair dismissal;
  • any protective award ordered by an employment tribunal;
  • any statutory payments in respect of time off work or suspension on medical or maternity grounds;
  • any statutory redundancy payment (subject to certain conditions);
  • any reasonable sum to reimburse a fee paid by an apprentice or articled clerk; and
  • money in lieu of statutory notice up to a maximum of £571 per week.

If an employee is prevented from working due to outside circumstances, are they still entitled to payment?

If an employee normally required to work on a particular day is prevented from working by circumstances outside their control, in most circumstances, the employer must still pay them for the hours agreed. The employer can withhold the employee’s normal wages only if the contract of employment expressly specifies that they are paid only for the actual service rendered and are not entitled to payment if they do not perform any work. In these circumstances, the employee must be paid a guarantee payment of up to £31 per day. This is payable for a maximum of five days in any three-month period. This guarantee payment is payable provided that the employee has been employed for a month or more under a contract of employment.

How can employers avoid race discrimination when taking steps to guard against illegal working?

An employer can be subject to civil penalties or criminal prosecution if it employs someone who does not have the right to work in the UK. To guard against this, employers should carry out a right to work check for all individuals to whom they offer employment.

To avoid allegations of race discrimination, employers should treat all applicants in the same way. They should not make any assumptions about which individuals may or may not have the right to work in the UK based on, for example, their name, colour, accent or the length of their residence in the UK. Employers may wish to inform all job applicants who are invited to interview that a right to work check will be required before they can be employed.

The Government introduced an updated Code of practice for employers: avoiding unlawful discrimination while preventing illegal working on 6 April 2022. Although the code is not legally binding, a failure to observe it may be taken into account by an employment tribunal in its assessment of a complaint of race discrimination.

What steps must an employer take to ensure that a job applicant has the right to work in the UK?

Before allowing a job applicant to start work, the employer must carry out a right to work check.

From 6 April 2022, employers are able to use a new digital identification verification service when carrying out checks for British and Irish citizens, based on a valid passport (or Irish passport card). To do this, the employer must use a certified Identification Document Validation Technology (IDVT) provider.

Alernatively, the employer should request that the job applicant produce original documentary evidence indicating that they have the right to work in the UK, check that the documentation appears to relate to the job applicant and keep a copy of it for the duration of the person’s employment and for two years after the termination of employment.

The Home Office produces lists of acceptable documents for the purposes of checking an individual’s right to work in the UK. See:

  • Documentation acceptable as proof of right to work in the UK – indefinite right to work in the UK (list A); and
  • Documentation acceptable as proof of right to work in the UK – limited right to work in the UK (list B).

In some circumstances, the employer must use the Home Office online right to work checking service to confirm the applicant’s right to do the work in question. The employer will be able to conduct an online check only where the applicant has:

  • a biometric residence permit number;
  • a biometric residence card number;
  • settled status under the EU settlement scheme;
  • status under the points-based immigration system rules; or
  • a frontier worker permit.

What are “qualifying earnings” for the purposes of pensions auto-enrolment?

Qualifying earnings are gross earnings of more than £6,240 and not more than £50,270 for the 2022/2023 tax year. For these purposes, earnings include: salary; wages; commission; bonuses; overtime; statutory sick pay; and statutory maternity, paternity and adoption pay.

When does an employer have to re-enrol workers who have opted out after auto-enrolment into a pension scheme?

Workers can opt out of a pension scheme within one month of being auto-enrolled by their employer. Employers must automatically re-enrol eligible jobholders who have opted out every three years.

The employer can choose its re-enrolment date from within a six-month window beginning three months before the third anniversary of its duties start date or its previous re-enrolment date (if re-enrolling for the second or subsequent time), and ending three months after that anniversary. For example, if an employer’s previous re-enrolment date was 1 October 2019 it could choose a re-enrolment date between 1 July 2022 and 31 December 2022.

The employer must complete re-enrolment of its eligible jobholders within six weeks of its chosen re-enrolment date. However, membership of the pension scheme must be backdated to start from the re-enrolment date.

Employers cannot choose a different re-enrolment date for different sections of the workforce, or for individual workers. The same date applies across the employer’s workforce. Employers cannot use postponement at their re-enrolment date.

What information are employers required to publish under the gender pay gap reporting duty?

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (SI 2017/172) set out the details of the gender pay gap reporting duty for private- and voluntary-sector employers. Under the Regulations, employers are required to publish:

  • the difference in mean pay between male and female employees;
  • the difference in median pay between male and female employees;
  • the difference in mean bonus pay between male and female employees;
  • the difference in median bonus pay between male and female employees;
  • the proportions of male and female employees who were paid bonus pay; and
  • the proportions of male and female employees in each quartile of their pay distribution.

The pay information must be based on data from a snapshot date of 5 April every year. The bonus information must be based on the preceding 12-month period. For example, when publishing information about the snapshot date of 5 April 2022, the bonus information must be based on the 12 months leading up to 5 April 2022. Employers have 12 months from the snapshot date each year in which to publish the information, meaning that publication of information about 5 April 2022 is required no later than 4 April 2023.

The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 (SI 2017/353) set out an equivalent duty for the public-sector employers in England. The public-sector duty mirrors that for the private and voluntary sectors, with one significant difference being that the snapshot date for gathering data each year is 31 March, not 5 April.

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