Reforms to Employment Tribunals

Employers may find it easier to avoid employment claims under proposed reforms to the tribunal system according to Andrew Fishleigh.

The coalition government has outlined plans for reforming employment tribunal procedure and a number of the suggestions, if implemented, will revolutionise the way in which tribunals operate.

For employers there is some realistic prospect that claims will be easier to avoid, although critics say the reforms are likely to be a major stumbling block for employees with genuine cases.

Initial changes which have been implemented are:

• The headline news is that the current qualifying period for unfair dismissal has been increased from one year to two years, from April 2012. This change is intended to lessen the numbers of claims going to tribunal. However, this will not affect employees who only have 12 months continuity when the new rules are applied so existing rights will not be affected.
• Employment judges will be able to sit alone without lay members in unfair dismissal cases.
• Witness expenses can now be ordered to be paid by a party to the claim and the maximum costs order has been increased from £10,000 to £20,000. In weak cases, deposits of £1,000 can be ordered – this was previously limited to £500.
• Immigration rules have been changed so that the stay of temporary Tier 2 migrants can be limited to 6 years and overseas domestic workers will be restricted in changing employer.

Other changes which have been mooted and appear to be in the pipeline include:

• A new system of pre claim mediation of claims may be introduced with an initial trial run involving the retail sector, followed by geographical mediation that will run cross-sector.
• Early conciliation will last 4 weeks which may be extended to 6 weeks by ACAS, and forms will be submitted to ACAS and not a tribunal in the first instance. Claim forms will be required to go to a tribunal later if the conciliation does not work.
• Compromise agreements will be standardised with provision of a model text to employers. It remains to be seen whether any real costs savings will apply since most large employers already have standard agreements and if not employers’ lawyers use standard precedents which can be modified.
• The long and laborious listing of each end every claim which will be seen in all standard such agreements may be abolished, and lawyers who advise on discrimination will be free to advise clients on compromise agreements, an area currently shrouded in some doubt.
• At present there has to be a dispute in existence to enable ‘without prejudice’ offers to be made by either employer or employee – that will change with the proposed introduction of ‘protected conversations’, where an offer can be made even if no dispute has arisen. So it would not be necessary to issue a grievance or instigate disciplinary proceedings as now in order to create a notional dispute.
• More worrying for claimants is the proposed introduction of fees ranging from £150-£250 to issue a claim and £250- £2,150 if the case proceeds to a full hearing. Also, fees may be introduced for counterclaims, lodging appeals, obtaining written reasons and reviews of cases all of which are free to the parties at present. So employers will also be hit financially.
• There will also be financial penalties imposed on employers found to have breached employment rights where there are “aggravating features”. This is proposed as being half the amount of the total award with an upper ceiling of £5,000. It is not known how this differs from the current system where breach of the ACAS code on disciplinary procedures can lead to a 25% increase or decrease in the compensatory award, depending on which party commits the breach.

Additionally the following changes have been mentioned:

• A review of agency worker regulations – the last regulations were only brought in to force 6 months ago so this may be seen a premature tampering!
• Making CRB checks simpler in order to avoid administrative repetition.
• Extending flexible working to all employees with no service requirements as at present.
• Improving parental leave.