Be prepared for legislation changes in 2011

The change of Government in May 2010 has caused a number of rethinks in terms of legislation affecting small businesses. Set out below are some of the business-related measures that are scheduled to be introduced over the next 12 months.   

Under the Bribery Act, which takes effect on 1 April 2011, a new 'corporate' offence of allowing bribes to be offered or paid by a person acting on behalf of a business is introduced. Under this legislation, if any employee, agent or subsidiary offers or pays a bribe in order to win or retain business, not only will that person commit an offence, but the business they claim to be working for will also commit an offence, even if its directors or managers were not aware of the actions of the individual. The rules also cover accepting a bribe. A statutory defence against this new charge will be that the business has put in place internal controls to deter bribery, and these controls meet a statutory test of  'adequacy'. Statutory guidance on what this test means is to be issued in early 2011 by the Ministry of Justice - it will be vital for all businesses that they take this seriously and implement meaningful controls, which have the purpose and effect of ensuring that no acts of bribery take place on their behalf. 

Bear in mind that, while this new offence is often referred to as a 'corporate' offence, it may in fact be committed by any commercial organisation, which will include partnerships as well as companies, as long as they are involved in commercial activities. Note that a bribe could cover something as simple as a small payment to expedite an order, or accepting a trip to an event that might be considered unreasonable or out of proportion to the normal course of business.

Enhanced paternity rights will come into effect for babies due on or after 3 April 2011. The current right to take two weeks' leave will be extended, for eligible employees, so that they will be able to take up to 26 weeks' additional paternity leave to care for a child under one year of age. Eligible persons include adoptive parents and people who are married to, or in a civil partnership with, the child's mother, but are not the child's father, as long as they expect to have the main responsibility for bringing up the child. 

Much of the Equality Act came into effect in October 2010. Other provisions will be introduced in stages following further consultation with stakeholders. One provision which is currently due to take effect in April 2011 concerns positive action in recruitment and promotion. 

Under this change, employers would be able to favour job candidates on the basis of a 'protected characteristic' (for example, sex, race, and sexual orientation) which is currently under-represented in the employer's workforce. This provision has, however, come in for re-examination by the coalition Government, and at this stage there is doubt whether it will in fact be implemented. If it is not, then existing positive action schemes would become illegal. If allowed, employers should still guard against positively discriminating.

The Apprenticeships, Children and Learning Act 2009 introduced a statutory right for employees to make a request to take time off to study or train - this is popularly known as the Time to Train right. Employers are obliged to consider seriously any requests of this kind that they receive, but will be able to refuse a request where there is a good business reason for doing so. The right to make a request in relation to study or training was introduced for employees in organisations with 250 or more employees on 6 April 2010. The intention is still to extend this right to employees in small and medium-sized enterprises in April 2011.

The Government will extend the current statutory right to ask for flexible working rights to parents (or adoptive parents) of children under 18. This will take effect from April 2011. This new category of eligibility adds to the existing list of persons who have this right -

- parents of children aged up to 17 

- parents of disabled children aged under 18 

- carers of certain adults. 

The right is to ask the employer for permission to work 'flexibly' - there is no presumption that the request will be granted (although in practice most are). The employer has the right to refuse a request if there is a strong business case for saying no. 

The hourly rates for the National Minimum Wage will be revised with effect from 1 October 2011. The new rates will be announced in the Spring of 2011. At present, the 2010/11 rates are £5.93 (for workers of 21 and over), £4.92 for those between 18 and 20, £3.64 for workers between 16 and 17, and £2.50 for first-year apprentices.

Employers will be prevented from forcing employees to leave employment because they have reached the age of 65 - the so-called 'default retirement age'. As from October 2011, it will be illegal to do this, although in future they will be able to lay down a compulsory retirement age, assuming they can  "justify it as a proportionate means of achieving a legitimate aim". They will still be able to dismiss people if the reason for the dismissal is strictly related to the employee's capability to do the job: so, it will still be possible for employers to 'retire' people by a specified age where there is a demonstrable need for the job concerned to be carried out by persons with a high degree of physical fitness. An employer that issues a notification of retirement before 6 April 2011 will still be able to 'retire' the employee if his or her retirement date is before 1 October 2011. What will happen between 6 April and 1 October is still to be decided by the Government.

New rules regarding the employment of agency workers will come into effect on 1 October 2011. The changes set out in the Agency Workers Regulations 2010 will give agency workers the same basic employment terms and conditions as full-time employees after 12 weeks in a given job. The Regulations implement the EU's Temporary Agency Workers Directive.