Since the Coalition Government announced its plans for the “most radical reform to the employment law system for decades” back in November 2011, the eyes of the UK business community have been waiting to see whether the powers that be would deliver upon their promise to “swing the pendulum” back in favour of the employer.
However, new statistics recently published which show that between the periods of 1st January 2013 to 31st March 2013 there was a 37% increase in claims lodged compared to the same quarter in 2012, appear to indicate that the Government’s intentions to reduce claims have failed to materialise.
Employment Tribunal Fees
Employees that lodge a claim from 29th July 2013 will have to pay a fee at two stages of the claim – at the issue of the claim and if the claim gets to a hearing. The level of fees is dependent upon the complexity of the claim and is as follows:
Level 1 claims (e.g. redundancy pay or unfair deduction from wages):
Level 2 claims (e.g. unfair dismissal or discrimination):
The individual will be responsible for paying the relevant fee, which they may find difficult to pay, especially as a proportion of people will be recently unemployed and without any source of income.
The Tribunal will be able to order that in the event of the individual winning their claim, their fees will be reimbursed by the losing party. However, a lot of employers will wait to see whether the employee puts their money where their mouth is and lodge a claim before they take any threatened litigation seriously.
Claims are expected to rise significantly in the weeks before the introduction date in a blatant attempt to avoid incurring fees; however, in the longer term it is predicted that the introduction of fees will dissuade employees who have little chance of success from lodging claims and encourage mediation between the parties.
STOP PRESS!
The latest twist surrounding the introduction of fees has come from Trade Union UNISON, with the announcement that it intends to apply to the High Court for a Judicial Review of the decision to implement fees. It has claimed the fees are unlawful as they will make it prohibitively difficult to enforce EC law; it is also claimed the fees will lead to indirect discrimination against women, as women typically earn less than men. We’ll keep an eye on this with great interest and keep you up to date with any developments.
New Employment Tribunal Rules
New rules which also come into being from 29th July 2013 will introduce a paper sift stage upon receipt of the claim and response, whereby a judge will have the power to strike out any claims which appear to be lacking reasonable prospects of success.
These rules will also allow for the striking out of claims if the individual fails to pay the correct fees within a specified time.
Settlement Agreements
29th July 2013 is set to be a busy day in the world of employment law as settlement agreements will also be introduced on this date. A Settlement Agreement is a new name for the more commonly known Compromise Agreement, which will allow employers to have confidential discussions with employees regarding negotiating agreed terms to terminate their employment, which will be inadmissible in an Employment Tribunal.
Reduced cap on Compensatory Award for Unfair Dismissal
A reduction on the cap on the compensatory award for unfair dismissal to the lower of £72,400 and 52 weeks’ pay for the individual employer is also to be introduced from 29th July 2013.
In reality, only 1-2% of claims are awarded the maximum compensation, with most claims awarded an average sum of £5,000-£6,000. The possible impact of this change could provide employees with a more realistic expectation of the value of their claim, which in turn could make settling claims more achievable.
One thing’s for sure, all the changes soon to be implemented will cement the reputation of employment law as one of the fastest changing areas of law within the UK’s legal system. At Howells Solicitors, our specialist Employment Team will keep you up to date with the latest key developments, ensuring any advice you need is practical, suited to your business and most importantly, in a language that you understand.
Our three practical tips for dealing with employment law:
1. Provide contracts to all employees to ensure you and
your business are adequately protected.
2. Keep a paper trail – make records of any discussions or meetings
you have with employees. It may be something you will one
day rely upon in a Tribunal.
3. If you are unsure of anything, seek advice. Employment law is
notorious for its traps and pitfalls - don’t be caught out!
If you require any additional information or would like to arrange a meeting about any specific employment law matters you might have, please phone 01792 410016. We can arrange to meet you at your premises, at any of our offices or elsewhere should the matter require it.
