Staff Matters

A number of changes came into force on April 6 this year, following the consultation.

• Employment judges can now hear unfair dismissal cases “sitting alone”, unless a judge directs otherwise. This change will be reviewed after one year. There will still be some scope for an unfair dismissal case to be heard by a panel of three where there is a factual dispute between the parties, or where that claim is being heard alongside another claim that requires the full panel – for example, a claim of discrimination. Similar provisions in relation to Employment Appeal Tribunal (EAT) judges are to be implemented at a later date.

• For claims submitted after April 6, witness statements at the hearing are taken as read, unless a tribunal directs otherwise.

• The payment of expenses to parties and witnesses in respect of their attendance at tribunal hearings has stopped. Tribunals now have new powers to direct that parties to the litigation should bear the costs of witness attendance, where a witness order has been issued. The winning party may claim these costs back from the losing party.

• The limit for deposit orders has been raised from £500 to £1,000 as a condition of continuing with a relatively weak claim or defence.

• The cap on costs awards has been raised from £10,000 to £20,000. Such costs are currently awarded in limited circumstances, where a party has acted unreasonably or is vexatious.

In addition, there was an increase in the qualifying period for unfair dismissal. The qualifying period for bringing unfair dismissal claims increased from one to two years from April 6. This increase will only apply to those starting a new job on or after this date. Employees whose employment started before that date will remain subject to the one-year qualifying period.

In February 2012, the maximum compensatory award for unfair dismissal increased from £68,400 to £72,300. The maximum limit on a week’s pay also increased from £400 to £430.

Measures in the Enterprise and Regulatory Reform Bill

This bill, which is going through Parliament, contains a number of measures designed to simplify the employment tribunal system and to resolve disputes more quickly and more cheaply. These include :

• Employer and employees will be encouraged to settle their disputes through ACAS conciliation and the use of compromise agreements, now re-named “settlement agreements”.

• The introduction of a “rapid resolution scheme”, whereby experts or legal officers will make decisions on written submissions in less controversial employment law issues, such as disputes over holiday pay.

The bill also proposes a new limit on the compensatory award for unfair dismissal, and penalties for employers whose breach of employment rights has an “aggravating” feature. The size of the penalty is to be determined by tribunals. A tribunal would have the power to impose a penalty of 50 per cent of any financial award, subject to a minimum of £100 and a maximum of £5,000, where there are “aggravating features” (yet to be defined). There will be a 50 per cent discount (of the penalty) if the employer pays within 21 days.

Fees for tribunal claims

The Government has issued its response to its consultation on charging fees for employment tribunal claims. It has confirmed that claimants will have to pay to bring an employment tribunal case from summer 2013.

There will be two levels of fees. Level one claims include claims for breach of contract, a redundancy payment, unauthorised deductions from wages and claims relating to annual leave under the Working Time Regulations. For level one claims, a £160 issue fee and a £230 hearing fee are involved – a total of £390.

Level two claims include unfair dismissal, discrimination, equal pay and the vast majority of other claims. The issue fee for this level is £250 and the hearing fee will be £950 – a total of £1,200.

• The hearing fees will become payable in advance, four to six weeks prior to the hearing. There will also be a separate fee structure for multiple claimants. If a claimant agrees to mediation by the judge, rather than pursuing a full claim, the cost will be £600.

Those on low incomes will be able to apply for exemption from fees under the current HM Court Service remission system. Further consultation on this system is due to take place in the autumn.

Tribunals will have the power to order the unsuccessful party to reimburse the fees paid by the successful party. There will also be fees for appeals to the employment appeal tribunal, with an issue fee of £400 and a hearing fee of £1,200.

Clearly, with the changing employment law landscape, practices need to pay attention to how they manage their employee relationships.