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Business Services  •  Small Business

Government brings in a raft of new employment policies for 2012

By RJP LLP on 27 February, 2012

There are a lot of changes afoot this year for business owners with the government planning plenty of new policies for employers. Taking a short break from tax issues, we outline some of those most likely to impact our clients.


Although the government has announced that automatic enrolment legislation for pensions will start as planned for employers with more than 250 employees, smaller companies are being given more time. Organisations with between 50 and 249 employees are getting an extra year, and will need to start auto-enrolling employees between 1 April 2014 and 1 April 2015. Companies with under 50 employees will not have to auto enrol their staff for pensions until April 2017.

Our advice to clients affected by this is to start re-thinking your remuneration packages as soon as possible, to slowly build in the impact of this change rather than have to face the financial implications in one hit.

Employment tribunals

From the start of February, new maximum compensation award levels were introduced.  The maximum total payout is now £72,300 and the cap on a week’s pay for calculating redundancy payments and basic awards will increase to £430.

Other Employment Tribunal changes coming into force will include an increase in the maximum deposit order from £500 to £1,000 and a doubling to £20,000 of the maximum costs that a Tribunal can award.

Parental Leave

Starting from 8th March the new Parental Leave Directive is being implemented. It means an increase by one month in the maximum leave allowed to no more than 4 months.

Unfair Dismissal

The period in which an employee can pursue a claim for unfair dismissal will increase from one to two years.

To discuss any of these issues, please contact Simon Paterson by emailing



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Probate and Inheritance Tax



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