Are you ready for upcoming employment law changes?

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lawhammer200A raft of UK employment law changes relevant to all organisations will be implemented, and it is crucial for employers to be aware of exactly what is changing.

It will be necessary to pay a fee in order to lodge a claim in the employment tribunal or an appeal in the employment appeal tribunal.

All claims made in the employment tribunal and the employment appeal tribunal will be liable to pay a fee or make an application for fee exemption. The fees will be:

Level 1 Claims: Claims will include breach of contract, wages claims, equal pay claims, holiday pay, redundancy pay, some time off rights.

Level 2 Claims: Claims will include unfair dismissal, detriment, and discrimination claims.

Fee Type              Issue Fee £     Hearing Fee £         Total £
Level 1 Claims      160.00            230.00                   390.00
Level 2 Claims     250.00            950.00                  1,200.00

While fees for claims are payable in advance, the tribunal will have the power to order an unsuccessful party to reimburse the fees of a successful party.

Commenting ahead of these changes, Workplace Law HR Consultant, Tar Tumber, said:

“The first area of change relates to a new tribunal fee system, whereby employees raising claims will have to pay a two-fold fee: the first installment will be at the time of logging a claim in the first place; and the second installment to be paid if and when, the claim goes to hearing.”

“There is also a multiplier in the cases of multiple claimants. Whilst my initial thought on this is that it should have a positive impact on employers by putting off those employees with malicious or vexatious claims; the down side is that employees who genuinely have a case for discrimination or are being treated unfairly may also be put off from raising a claim.”

“That said, there will be a ‘means tested’ system for those claimants who earn a very low wage or are unemployed whereby the fees may be partly or wholly waived.”

Tar continued:

“However, my understanding is that the acceptance and processing of these fees, including the assessment of which Claimant can or cannot pay the fees, will be undertaken by the employment tribunals service.

“As the Service already seems to suffer from an existing backlog of unprocessed claims, this new requirement on the Service might cause further blockages in the timely processing of claims going forward. This in turn creates delays and concerns for all parties involved.”

New employment tribunal rules of procedure will also come into force, replacing the current procedural rules. They will introduce changes to current practice and procedure.

Unfair dismissal compensation cap

The new unfair dismissal compensation cap will also take effect and the cap will be the lower of £74,200 or one year’s gross pay for claims where the effective date of termination is on or after 29 July 2013.

Explaining the changes, Tar said:

The cap for unfair dismissal cases has also changed and it is worth employers and employees being aware of the new calculation as generally people think of tribunal compensation payouts as being six figures – generally these are the high profile cases that are documented in the media.

“However having a set formula which does not increase year on year is a good idea as everyone can then focus on the realistic value of an unfair dismissal claim and decide how best to manage a claim if one comes in.”

Compromise agreements renamed settlement agreements

Compromise agreements and compromise contracts will now be known as “settlement agreements” in all relevant pieces of employment legislation.

Pre-termination discussions to be inadmissible in unfair dismissal proceedings

Pre-termination negotiations will be prevented from being referred to in evidence in unfair dismissal cases, unless there has been “improper behaviour”. ACAS has issued guidance to employers on pre-termination negotiations, in respect of what should and should not be done. Click here for a link to the ACAS guidance.

Speaking about the changes in this area, Tar stated:

“Another key area of reform relates to ‘pre-termination discussions’ where employers can now have ‘off the record’ discussions with employees about their performance and related ‘exit plans’ in the safe knowledge that these conversations cannot be referred to in any future litigation, although exceptions to this do apply.”

“These discussions can take place even when the employee is unaware of shortcomings, or management concerns about their performance.”

“Any agreed exit would then be wrapped up in a ‘settlement agreement’ which would essentially have the employee sign away their rights to unfair dismissal at a later date.”

Tar continued:

“Again, in theory, my view is that such discussions seem like a good idea, as they essentially encourage both parties to discuss any issues openly and honestly.”

“However the concern is that employers could misconstrue this as being a ‘green light’ to have inappropriate conversations and simply exit staff from the business. This behaviour is not protected and employees in such situations may be able to raise claims of discrimination and refer to the ‘off the record’ conversations at a later date.”

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