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Employment tribunal upheaval in prospect

Employment Law & HR
BG Purple

Dramatic amendments to employment law are on the cards for 2011. One of the key proposals is the doubling of the qualifying period for employees to claim unfair dismissal to two years.

In late January Business Secretary Vince Cable announced fundamental reform proposals for the employment tribunal system.  Cable said that businesses, especially smaller companies, were wary of creating jobs if they ran a significant risk of expensive employment tribunal litigation from workers they were taking on. The government believes that the changes, alongside a proposed Employers’ Charter, will encourage job creation and better people management. Ministers are consulting on the proposals until 20 April 2011.

In addition to doubling the length of service that employees will require to make a claim of unfair dismissal, the following reforms are proposed:

Mediation – the government is considering how parties could make greater use of alternative dispute resolution tools such as mediation. The consultation aims to gather information about current use, costs and benefits, and barriers to parties resolving disputes this way.  

Early conciliation – the plans include a requirement for all claims to be submitted to ACAS (the Advisory, Conciliation and Arbitration Service) in the first instance, rather than direct to the employment tribunal. ACAS would then have a specified period, probably around one month, to try to broker pre-claim resolution of all cases.  

Weeding out weaker cases – the proposals include extending tribunal powers to strike cases out more easily. They would also allow an employment judge to issue a deposit order (obliging either party to pay a deposit in order for the case to continue) at any stage of the proceedings, and to give the Employment Appeal Tribunal (EAT) the power to make deposit orders.

A final measure to dissuade claimants from bringing weak cases would see an increase in deposit and cost limits for weak claims from £500 to £1,000 and for vexatious claims from £10,000 to £20,000.  

Encouraging settlements

Provision of information – this proposal would require claimants to provide more information about their claims including a statement of loss for claims seeking financial compensation.  

Formalising offers to settle – this proposal would bring tribunal procedures into closer alignment with the ordinary civil courts. Companies would be able to make a formal financial offer of settlement, and if the tribunal subsequently made a smaller award, there would be provisions under which the claimant could be obliged to contribute to the company’s costs.

Shortening tribunal hearings

The government proposes that witness statements should be taken as read in all hearings, resulting in  shorter hearings and reduced costs for the system and business. As noted in the last edition of LAWmail witness statements are the exception rather than the rule in Scotland.

It is also proposed that claimants and their witnesses would no longer be able to claim their expenses for attending the hearing. The aim is to make claimants think carefully about the number of  witnesses they call, again potentially reducing length of hearings.  

The plans also include proposals to include unfair dismissal as one of the kinds of claim which can be heard by a judge sitting alone. It is also proposed that the Employment Appeal Tribunal, which hears appeals from employment tribunals, should no longer be obliged to comprise a judge and two wing members.

A new tier of legal officers is being considered to deal with case management work to free up judges time to concentrate on matters requiring judicial expertise.

In the longer term the government is considering charging parties in order to make a claim. It is understood that a figure of £500 per case is being considered. While this would also apply to employers who wished to make a counter-claim against employees, the burden of a charging regime would fall largely on claimants.

The proposals have broadly been welcomed by employers’ organisations, and condemned by the trade unions. No doubt there are some kites being flown among the ideas, and the government’s final proposals will look a bit different from the current version.

We will keep LAWmail readers up-to-date with the consultation as it progresses.

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