Employment Tribunal reforms – a new era

Posted by Amanda Okill

Senior Associate

On Monday, 29th July 2013, new Employment Tribunals Rules of Procedure came into force bringing in a number of controversial and far reaching reforms.

The most significant are highlighted below:

Fees

For the first time since their establishment in 1960 fees are being introduced in both the Employment Tribunal and Employment Appeal Tribunal. From Monday, 29th July Claimants will pay both an issue fee and a hearing fee. The issue fee ranges from £160 for simple claims (type ‘A’ claims) relating to redundancy pay, unpaid holiday and unlawful deduction of wages to £230 for all other claims (type ‘B’ claims) such as claims of unfair dismissal and discrimination under the Equality Act. Once a case proceeds to a hearing there is a further fee of £250 for the type ‘A’ claims and £950 for type ‘B’ claims due from the claimant. Fee remissions are available, for low earners, those with a limited disposable income, and/or those in receipt of qualifying benefits. The fee regime will not be retrospectively applied and fees will not be due in respect of hearings for claims issued prior to 29th July 2013.

The introduction of fees is, according to the government, intended to bring down the number of tribunal claims and in particular to weed out vexatious claims which lack merit. It is also aimed at shifting the burden of financing the tribunal system away from the ordinary taxpayer, who will not make use of the tribunal in their working life. As stated by Justice Minister Helen Grant  "It is not fair on the taxpayer to foot the entire £74m bill for people to escalate workplace disputes to a tribunal.”  In June 2013 UNISON, however, lodged an application in the High Court for judicial review into the introduction of employment tribunal fees. UNISON claims that by bringing in these charges the government will make it virtually impossible for a worker to exercise their rights under employment law. Their application has been refused on paper.

Cap on the compensatory award

In cases of unfair dismissal, the compensatory award limit will become the lower of the statutory cap (currently £74,200) or one year's gross pay.

For employees earning less than £74,200 the maximum compensation that they will be able to recover for a successful claim of unfair dismissal will be their annual salary, or the statutory cap for those earning more than £74,200 per annum.

In January 2013, the government stated, during consultation, that a salary-based cap would help to manage employees' expectations of likely compensation, encouraging early resolution of disputes and creating more certainty for employers over the likely total cost of an unfair dismissal claim.

Pre-termination negotiations

Employers and employees will be able to engage in confidential, "off the record" discussions and negotiations about parting ways on the basis of mutually agreeable terms. These discussions, to be entered into prior to the termination of employment, will now be inadmissible in any subsequent unfair dismissal proceedings and consequently both parties, but particularly employers, should feel more confident in commencing them. The new regime does, however, have certain limitations. Chief among these is that confidentiality applies only in respect of ordinary unfair dismissal proceedings. It does not apply where an employee brings proceedings for automatically unfair dismissal (for example, whistleblowing), or a discrimination or breach of contract claim. Furthermore, if either party engages in improper behaviour, evidence of pre-termination negotiations will be inadmissible only to the extent that the tribunal considers just.


How can we help you

Call us on

0333 331 9877

Email your enquiryEmail your enquiry