Legal Updates

Employment Law – Employment Act 2008

On the 6th of Aril 2009, the Employment Act 2008 ("the Act") came into force. The Act received Royal Assent in November 2008. Although the majority of the Act is now in force, the dates of enactment for the rest of the Act are yet to be confirmed. Most of changes to the law implemented by the Act are relatively minor in nature. However, there are a number of changes which are worth noting, the most pertinent of which is the repeal of the statutory dispute resolution procedures.

The notoriously complex statutory dispute resolution procedures have not been considered popular since 2004 when they were introduced.

The most notable changes are as follows:

  • ACAS code of practice
  • ACAS conciliation
  • Breaches of procedure
  • Calculating the national minimum wage
  • Determination
  • Employment agencies
  • Statutory dispute resolution procedure
  • Trade union membership

1. ACAS Code of Practice

The Code of Practice on Disciplinary and Grievance Procedures ("the Code") came into force on the 6th of April and has replaced the statutory dismissal and grievance procedures. The Code is intended to be of use to employers, employees and their legal representatives and provides information as to how certain employment related issues should be conducted. Most importantly, the Code outlines the best practice principles which should be followed in certain circumstances.

Further information can be found here:

It should be noted however that the Code is not legally binding. Even so, the principles as outlined in the Code will be considered by tribunals when making a determination as to the fairness of any particular dismissal. The Code will also have a bearing on the levels of compensation provided for in any given case. In the event an employer or an employee unreasonably fails to comply with the provisions of the Code, the tribunal will increase or decrease the compensation figure by 25%.

A lengthy guidance booklet complementing the Code has also been published. The guide aims to assist employers and employees in adhering to the provisions of the Code and provides a number of examples of disciplinary and grievance procedures which employers may wish to consider adopting in their normal business practice. However, as with the Code, the guidance booklet is not legally binding.

As a practical point of advice, employers should consider the incorporation of the principles found in the Code and the corresponding guidance booklet into their business handbooks.

2. Acas Conciliation  

There are two points which are worth considering here:

Conciliation prior to initiation of proceedings

The Act has amended the Employment Tribunal Act 1996 in that ACAS is no longer under a duty to conciliate and promote settlement prior to proceedings being brought before a tribunal. ACAS now has discretion as to whether or not to provide this service. This means that ACAS may now assign cases priority in that time and effort can be diverted from cases where settlement is unlikely to be reached. In circumstances where the tribunal is presented with a case of potentially unfair dismissal, although the ACAS conciliator is no longer under a duty to seek reinstatement of the employee,  they may still pursue this remedy where it is deemed suitable to do so.

Conciliation subsequent to initiation of proceedings

Previously, ACAS was only obliged to conciliate and promote settlement for a fixed period of time once proceedings were initiated. Now, the Act has extended this obligation up to the tribunal’s decision.

3. Breaches of Procedure

The Act repeals s.98A of the Employment Act 2002, which means that the fairness of a particular dismissal will no longer revolve around compliance with the statutory disciplinary and dismissal procedures. Instead, tribunals will apply the House of Lords’ decision in Polkey v A E Drayton [1988] and other similar cases. The decision in Polkey states that in the event a dismissal is procedurally unfair, a Tribunal may reduce or remove compensation based on their determination as to whether the employee’s dismissal would have occurred whether or not there was any procedural unfairness.

4. Calculating the national minimum wage

The Act has changed the law relating to payment of the national minimum wage ("NMW") in the following ways:

  • A new method of circulating underpayment of the national minimum wage, taking into account any increases to the national minimum wage for the period of underpayment has been introduced.
  • In the event an employer fails to comply with an employee’s notice of underpayment within 28 days of receiving that notice, the employer will be liable to pay a penalty of up to 50% of the total amount of underpayment. Penalty limits are now set between a minimum of £100 and a maximum of £5,000.

5. Determination

Under s.4 of the Act, tribunals have been given the power to make a determination on a case without the need for the case to be heard by an Employment Judge. A particular case is now only eligible to be "fast-tracked" where:

  • All parties involved in the proceedings give written consent to a determination without a hearing being held; or
  • The respondent to the case fails to respond to the proceedings or does not contest the case.

6. Employment Agencies

The Act also makes a number of changes to the Employment Agencies Act 1973. These changes are mostly minor, however the following is worth noting:

  • Offences committed under the Employment Agencies Act 1973 may now be dealt with by the Crown Court instead of the Magistrates’ Court. Please note that the Crown Court has the power to impose fines of any value.
  • The Employment Agency Standards Inspectorate has been given additional inspection powers.

7. Statutory Dispute Resolution Procedures

One of the most important changes that has occurred is that s.1 of the Act repeals s.29 to s.32 and Schedule 2 to Schedule 4 of the Employment Act 2002. This has the effect that the requirement to follow the statutory dismissal, disciplinary or grievance procedures has been removed. As a practical point of advice, this means that:

  • An employee is now able to bring a claim even if the employee has not raised a grievance with their employer and has not waited 28 days.
  • Dismissals are not automatically unfair where the statutory procedures have not been followed by the employer.
  • Tribunals no longer have the power to increase or decrease awards by up to 50% for non-compliance with the statutory procedures.
  • The automatic extension to the 3 month time limit for ongoing statutory procedures has been abolished.

8. Trade Union Membership

In the case of ASLEF v The United Kingdom [2007] it was held that the provision in s.174 of the Trade Union and Labour Relations (Consolidation) Act 1992 was contrary to the European Convention’s right of freedom of association. In s.174 grounds when a trade union may exclude an individual from trade union membership are provided for. However, it specifically states that it is unlawful to exclude an individual due to "protected conduct". Protected conduct includes political party membership.

ASLEF maintained a policy refusing membership to individuals who were members of the British National Party. A tribunal held that the policy unlawful, and ASLEF made an application to the European Court of Human Rights arguing that the UK legislation was in contravention of Article 11, Freedom of Association.

The application was successful and it was duly held that the UK legislation contravened Article 11 by not suitably balancing the trade union’s right to choose its members against an individual’s right to membership of the trade union. The Act makes amendments to s.174 which codifies the decision in ASLEF and provides trade unions with a broader power to exclude individuals from membership.

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© RT COOPERS, 2009. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.



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