Proposed employment changes

This page outlines proposed changes relating to the employment rules, largely from the 'Resolving Workplace Disputes' consultation. The proposed changes do not necessarily apply to Northern Ireland.

Resolving workplace disputes

The results of the 'Resolving workplace disputes 'consultation were announced by Business Secretary Vince Cable on 23rd November 2011. Some decisions such as fees for tribunal claims were known previously. See below for links on the consultation.

A major aim of these changes is to promote resolution of disputes without going to a tribunal.

For a seasonal take on the proposals: 12 days of employment law reform (link to mrsmarkleham.wordpress.com).

The proposed changes are outlined below:

Fees for tribunal claims
All claims will go first to ACAS
Protected conversations
Compromise agreements
'Rapid resolution' scheme
Financial penalties for employers
Expanding mediation
Review of employment tribunal rules
Deposit orders and cost awards
Taking witness statements as read
Meeting costs of witnesses
Unfair dismissal: continuous employment
Dismissal procedures: call for evidence
Links on the consultation

Fees for tribunal claims

News/ articles & comment on Employment Tribunal fees:

It is proposed that fees would be payable to Employment Tribunals, in respect of tribunal claims. There would also be fees for the Employment Appeal Tribunal.

A consultation on the proposals was issued on 14th December 2011: Introducing fees in employment tribunals and Employment Appeal Tribunal (link to justice.gov.uk). The consultation closes on 6th March 2012.

Subject to a remissions system for those on some benefits or low incomes (see below), there are two options for an Employment Tribunal fee structure which are being considered. Under Option 1:

There would be a fee to bring a claim, and also a hearing fee payable 4-6 weeks before a listed hearing.
Indicative fee levels for a discrimination claim brought by one person are £250 for bringing the claim, and £1250 for a hearing. There would be two lower fee levels for most other types of claim, such as unfair dismissal, which are considered to take less judicial and administrative resources.

Under Option 2:

There would be just one fee, payable when the claimant makes the claim. The fee would depend on whether the amount claimed exceeds £30,000.
The claimant would be asked to specify if their claim is above or below that amount. A higher fee would be payable by a claimant who chooses to pursue an award higher than £30,000. The tribunal could not make a higher award where the claimant chooses not to pay a higher fee.
The Government's initial view is that for a discrimination claim brought by one person the fee for a claim up to £30,000 would be £600, and £1750 for a higher claim.
A greater amount of advice and support would be required for claimant in order to enable them to make an informed decision about the value of their claim.

Under both Employment Tribunal options:

The fees above would initially payable by the claimant. However, the other party (normally employer) would be required to pay if the claim is unsuccessful, unless the tribunal considers this inappropriate.
There would also be further fees for various types of applications, eg a request for written reasons after an oral judgment. Here the fee would be payable by the person making the application, at least initially.
There would also be a fee for mediation by the judiciary. This would be payable by the respondent.
Fees would not be refundable by the tribunal (except under the remissions system), even a hearing fee if the case is settled before hearing.
The consultation document also discusses the issue of claims brought by more than one person.

The HM Courts & Tribunals Service remission system would apply. This allows fees to be waived or reduced if people are on certain welfare benefits, or have gross annual income or monthly disposable income below certain amounts. The remission system currently applied in civil courts in England and Wales would apply for employment tribunals across Great Britain, including Scotland.

Option 1, if chosen, would be introduced in 2013. Option 2, if chosen, would probably not take effect until 2014, since primary legislation would be required .

All claims will go first to ACAS

Claimants will normally be obliged to submit their complaint to ACAS first. This is to give parties an opportunity to resolve their dispute through conciliation before it can be taken to a tribunal. A claim could be lodged with the tribunal afterwards, within certain time limits. if either party refuses early conciliation or if conciliation is unsuccessful.

Protected conversations

There is to be a new system of 'protected conversations'. These will allow employers to raise issues such as poor performance or retirement plans in an open way, free from worrying it will be used as evidence in a subsequent tribunal claim. Employees could also inititiate protected conversations. The Government will be consulting on details in 2012. It is hoped this will help solve issues earlier without involving tribunals.

However, it seems that protected conversations will not allow employers to discriminate: Protected conversations will not allow employers to discriminate, says minister (link to personneltoday.com).

Further links:

Government to launch 'protected conversations' consultation (link to peoplemanagement.co.uk).
Government confirms plan to consult on "protected conversations" between employers and employees (link to xperthr.co.uk) which includes links to pros and cons.

Compromise agreements

The Government is to look at developing a standard text for compromise agreements, plus guidance, which parties may choose to use if they wish.

It will also consider amendments to enable compromise agreements to cover all existing and future claims without requiring long lists of causes of action. The Government will consult on any changes proposed.

From 6th April 2012 the Government is amending s.147 Equality Act to resolve uncertainties about compromise agreements and independent advice. See Reaching a settlement - compromise agreements.

'Compromise agreements' and - as Equality Act 2010 calls them - 'compromise contracts' are to be renamed 'settlement agreements'. The legislation will be amended. The Government believes this will help to avoid any party refusing to sign an agreement on the grounds that they do not want to be seen as 'compromising'.

'Rapid resolution' scheme

The Government is examining the case for a "Rapid Resolution Scheme". It is looking at a variety of options - but the scheme could involve an independent legal expert reaching decisions based on written evidence (no oral hearing).

The scheme would be a quicker and cheaper alternative to a tribunal hearing, open to those with more low value, straightforward claims, such as a dispute over holiday pay.

It is hoped this could significantly reduce the number of cases that actually come to a Tribunal, reducing costs, speeding up resolutions and freeing up the system. Proposals will be subject to a full consultation in due course.

In a survey of employment lawyers, the rapid resolution scheme was the most popular of the reforms, supported by 78%: Most lawyers believe employment law reforms 'unworkable? (link to workplacelaw.net), 20/12/11.

Financial penalties for employers

The Government intends to introduce a provision for employment tribunals to levy a financial penalty on employers found to have breached employment rights. The penalty will be payable to the Government rather than the employee. It will be in addition to compensation awarded to the claimant. Judges will have discretion about whether to exercise this power.

The Government says: "We expect [the penalties] will be imposed in those cases where a judge determines the breach involves unreasonable behaviour, for example where there has been negligence or malice involved. It is these cases for which deterrence effects are more important."

The financial penalty will be 50% of the amount awarded to the claimant, with a minimum £100 and an upper ceiling of £5,000. Tribunals can ascribe a value to non-financial awards. The penalty will be reduced by 50% for prompt payment within 21 days.

Expanding mediation

The Government is to embark on "a long term reform programme to build a new approach to resolving workplace disputes so that the use of mediation to resolve disputes becomes a more accepted, and trusted, part of the process." There will be a major pilot in the retail sector; and also a regional pilot of an area-wide approach to develop mediation networks that run across sectors within a particular geographical area.

A pilot scheme for two SME mediation networks in Cambridge and Manchester has subsequently been announced: Government to pilot regional mediation networks for SMEs (link to www.peoplemanagement.co.uk), 23/1/12,; and Exclusive: Edward Davey says 'When it comes to employment law we want employers to help themselves' (link to HRmagazine.co.uk), 23/1/12.

Review of employment tribunal rules

The Government is asking Mr Justice Underhill to undertake a "root-and-branch review" of the rules governing employment tribunals, "in order to modernise them and ensure we have a system that meets the needs of an economy which is striving to recover and grow." Mr Justice Underhill retires as President of the Employment Appeal Tribunal at the end of 2011.

The review is to "address concerns that the Rules have become increasingly complex and unwieldy over time and are therefore no longer fit for purpose. The intention is that the review will deliver a streamlined procedural code.

Deposit orders and cost awards

The Government is increasing the limit for deposit orders from £500 to £1,000 and for cost awards from £10,000 to £20,000. (Costs will still only be awarded in limited circumstances.) The regulations are SI 2012 No. 468 (link to legislation.gov.uk) and apply to claims presented on or after 6th April 2012.

Some related issues are to be considered in the "fundamental review".

Under a deposit order, a party may be required to pay a sum in order to be allowed to proceed with all or part of a claim/response which the tribunal considers to have little prospect of success.

Taking witness statements as read

Tribunal rules are to be changed so as to require witness statements (where taken) to be taken as read, unless a judge or tribunal directs otherwise. So the normal position should be that witnesses do not have to read out their witness statements - which will be welcome to many witnesses who stammer. There is already a case on this: Mehta v. Child Support Agency (2010) (Word doc, link to employmentappeals.gov.uk). Presumably witnesses could still be cross-examined at the hearing on their witness statements.

The regulations making the change are SI 2012 No. 468 (link to legislation.gov.uk) and apply to claims presented on or after 6th April 2012.

Meeting costs of witnesses

Tribunal rules are being changed so that tribunals and judges have powers to direct parties to bear costs of witnesses' attendance, where a witness has attended pursuant to a witness order; and that the party ultimately losing a case should reimburse the successful party for any such costs already paid out. The obligation would not be means-tested.

The regulations are SI 2012 No. 468 (link to legislation.gov.uk) and apply to claims presented on or after 6th April 2012.

Unfair dismissal: continuous employment

For people starting employment on or after 6th April 2012, two years continuous employment (rather than one year as before) is normally required to claim for unfair dismissal: SI 2012 No. 989 (link to legislation.gov.uk). This does not apply to Equality Act claims, where no qualifying period applies.

It has been suggested that the change will lead to those dismissed within the 2 year period looking for alternative grounds to bring a claim, such as discrimination and whistleblowing, resulting in longer, more complex hearings. The Government does not agree there will be more discrimination (or other) cases than now.

Links:

Discrimination claims expected to soar in 2012 (link to telegraph.co.uk), 8/4/12
www.jamieandersonbarrister.co.uk/2011/10/a-summary-of-today/. - some comments on the unfair dismissal changes and proposals for fees.

Dismissal procedures: call for evidence

In March 2012, a call for evidence was issued on dismissal procedures generally, and on whether there should be "compensated no-fault dismissal for micro firms" - that is firms with 10 or fewer employees. See Government seeks views on dismissal rules (link to COI).

Compensated no fault dismissal could basically demolish unfair dismissal for these smallest firms, with perhaps any dismissal being permitted if redundancy compensation is paid. The Liberal Democrat element of the Coaliation clearly has strong reservations on this. However, the proposal would not affect discrimination rights. See also Osborne hints at no-fault dismissals for small businesses (link to personneltoday.com), 7/3/12.

The Government said in November 2011 that it would look at "radically slimming down our existing dismissal processes." It would also be seeking views on "how we might move to a simpler, quicker and clearer dismissal process - including, potentially, by working with ACAS to make changes to their Code, or by introducing supplementary guidance for small businesses." On the Code, see Grievance and disciplinary procedures: ACAS Code .

Links on the consultation

Government response to the consultation (pdf) - 23rd November 2011
BIS Press Release - 23rd November 2011
Vince Cable's speech - 23rd November 2011
'Resolving Workplace Disputes' consultation (link to www.bis.gov.uk) - January 2011

Wider publication of tribunal decisions

It seems that Employment Tribunal decisions are to be made available on the internet at some stage. At present only Employment Appeal Tribunal decisions are online.

The Government has also said it will also explore how it can ensure employers learn from tribunal judgments by looking to spread learning from individual cases in a systematic way. (Framework for a Fairer Future (link to equalities.gov.uk) page 31, June 2008).

The European and Human Rights Commission has recommended that the results of employment tribunal discrimination cases, and also county or sheriff court discrimination cases, should be easily accessible by members of the public. This is because reputation is a significant factor in influencing decisions by employers to avoid discrimination and to adopt good equality practice. (Page 42 of the EHRC's Discrimination Law Review response (link to Word doc on EHRC website).)

Top