Wages, Fees and Status - Employment changes Autumn 2013

Blog posts

17 Sep 2013

Jenny Holmes

‘Now the summer is coming to an end and we are all 'back to school', literally or metaphorically, it is time to focus on the upcoming changes to employment law and other statutory duties.

‘As you might be aware that there are two main time frames for employment law changes in the UK: one from 1 October each year and another to tie in with the beginning of the tax year on 6 April. In this blog post, we will be looking at some of the changes coming into force from October 2013 or earlier. Look out for another post in March ahead of the April changes.

‘Just to keep us on our toes, there have been a number of changes out of the normal cycle this year.’

Recent changes

Employee Shareholder Status 1

In addition to employee and worker, as of 1 September 2013, there is a new category of employee: the Employee Shareholder. Broadly speaking, this type of employee accepts fewer statutory employment rights (particularly in the fields of flexible working, redundancy and unfair dismissal) in return for a minimum value of shares in the employing company, currently set at £2,000. Take-up of this new contract type is expected to be limited.

Unfair dismissal compensatory award capped 2

Currently compensation for unfair dismissal is made up of two parts: the basic award and the compensatory award. From 29 July 2013 the maximum compensatory award (when capped) has changed from £74,200, to whichever is the lower of £74,200 or 52 weeks' pay.

Employment tribunal fees 3

A new fees system for Employment Tribunals also came into effect on 29 July 2013, introduced by the government to 'transfer some of the approximate £74m cost of running the employment tribunals and the Employment Appeal Tribunal from the taxpayer to those who use the system' 4. The new system has been challenged by Unison but remains in place until the judicial review has come to a conclusion (due to be heard in October 2013).

The fees are split into Type A and B depending on the nature of the claim and into two stages: Issue Fee and Hearing Fee. These range from £160 for a Type A Issue Fee to £950 for a Type B Hearing Fee. There is a system for remission of fees for applicants who cannot pay. It will be interesting to see whether claims to employment tribunals fall as a result.

Settlement agreements 5

Terms for mutually agreed terminations of employment (currently called compromise agreements), were renamed 'settlement agreements' from 29 July 2013. At the same time, a new concept of a 'pre-termination settlement negotiation' was introduced. These are similar to, but not the same as, the previous 'without prejudice' conversations, so caution should be exercised. The area is governed by an Acas Code of Practice with useful detail and templates available in the Acas guide6.

This remains an area in which specific legal advice should be taken to ensure that the right process has been gone through in both the written agreement and discussions beforehand.

Changes coming into effect on 1 October 2013

Increases to National Minimum Wage
  Current hourly rate (to 30 September 2013) New hourly rate (from 1 October 2013)

21 year olds or older £6.19 £6.31
18 to 20 year olds £4.98 £5.03
16 and 17 year olds £3.68 £3.72
First-year or under-19 year old Apprentice rate £2.65 £2.68
Changes to third-party harassment provisions under the Equality Act 7

A previous requirement for employers to take reasonable care to prevent harassment of their employees by a third party will be removed from 1 October 2013. However, the general duty of care remains so employers are still required to take steps to prevent harassment of employees.

N.B. Due care has been taken in compiling this blog post, however neither the author nor IES cannot be held responsible for any errors or omissions. This document is not intended to be a substitute for specific legal advice.


  1. Growth and Infrastructure Act 2013 Ch 27
  2. The Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013, s 2, (3)
  3. Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013
  4. Ministry of Justice (2013), Employment Tribunal and Employment Appeal Tribunal Fees Stakeholder factsheet, page 5, www.justice.gov.uk/downloads/tribunals/employment/et-fees-factsheet.pdf
  5. Statutory Code of Practice on Settlement Agreements (under section 111A of the Employment Rights Act 1996)
  6. Acas (2013), Settlement Agreements: A Guide
  7. Equality Act, 2010

About Jenny Holmes

Jenny Holmes joined IES as a Research Officer focused on employer-based research in 2013. She has extensive HR practitioner experience across the public, private and not-for-profit sectors, as part of in-house teams and as well as an external consultant through her own consultancy.

Her areas of particular interest are the direction and development of employment legislation, employee engagement, changing demographics and the broad impact this has on the workplace, as well as health, wellbeing and disability in the workplace.

She is currently working on an NIHR study into employee engagement in the NHS.

To arrange a media interview with Jenny, please email lorna.hardy@employment-studies.co.uk or call 01273 763 414.

Receive emails with new blog posts