I understand there are new HR rules coming into force this year, is there anything I can do now to prepare and do I need to comply considering we only employ 7 people?

Although a ‘moratorium’ was recently placed on the application of new employment legislation to small businesses, many changes to law that will be implemented in the near future have the effect of stripping away legislation as it currently stands, or making HR easier for all employers. Because of this, the moratorium is occasionally displaced.

Some Government moves have been created to specifically target small businesses this year. The introduction of the new employment status of ‘employee shareholder’, who will hold a distinct contract of employment, is one of them. Although this new contract can be used by all employers regardless of size, the Government have specifically pointed out that it is aimed at small start-up businesses who may otherwise be put off from recruiting new staff. An employee shareholder will be given at least £2000 in shares in the company, but will have no right to claim unfair dismissal or statutory redundancy pay. They will have only a limited right to request flexible working and training and will have different entitlements during maternity leave. These contracts are expected to be in use from April 2013.

Entitlement to parental leave is increasing in March 2013, which will mean that an eligible employee has the right to take 18 weeks parental leave; currently an employee may take a total of 13 weeks. You should review any parental leave policy that you may have and be aware of the greater entitlement should an employee wish to take time off.

Still on the family entitlements topic, the rates of statutory maternity pay will increase in April from £135.45 to £136.78 per week. This represents the smallest percentage increase for several years but it is important to implement nonetheless. The increase also applies to adoption pay and paternity pay. Statutory Sick Pay (SSP) will also increase, from £85.85 to £86.70.

In an example of employee rights being removed, from April it will no longer be possible for an employee to claim harassment by a third party. This means an employer can no longer be found liable under the Equality Act 2010 for harassment of their staff carried out by people who they do not employ.

The Public Disclosure Act will be tightened so that whistleblowing protection will only apply when an employee makes a disclosure that is ‘in the public interest’, and the consultation period when making 100 or more staff redundant will be halved to 45 days, however, this change will not have an impact on your small organisation.

It is also proposed to introduce settlement agreements during 2013, which will make termination of employment easier, but require a financial settlement to be made.

As long as you have an awareness of these changes, you will be able to manage situations effectively and in line with the current law.

Further assistance is available via our specialist tax advisors on
01455 852550.

By Ben Chaplin