Radical shake-up of the employment tribunal system

27 January 2011

It has been a long time coming but we now have the Coalition Government's blueprint for a radical shake up of the employment tribunal system. This is very much going to set the agenda for the lifetime of this Parliament, as far as employment reform is concerned.

The Consultation Paper, called "Resolving Workplace Disputes" was released this morning and the key proposals include:

  • A requirement that all claims be submitted to ACAS before they go to the Tribunal, giving ACAS a period of one month to attempt pre-claim conciliation;
  • Increasing the Tribunal's powers to root out "weaker cases" by ordering substantially increased deposits (up from £500 to £1,000) and increasing the amount of a potential fixed costs award from £10,000 to £20,000;
  • Beefing up the requirement for employees to provide statements verifying the financial losses that they are claiming;
  • Introducing into the tribunal system the power to make the equivalent of a "Payment into Court " (in fact written details of the offer will be lodged at Court rather than physically paid in) so that if a party chooses to reject the offer (and goes on not to beat it) they may be ordered to pay additional costs to the other side, or in the case of an employee he/she may receive reduced financial compensation;
  • Witness statements to be "taken as read" in all hearings (rather than read out loud, which until a recent decision of the Employment Appeal Tribunal, was the usual practice in most, but not all regions around the Country);
  • To allow employment judges to sit alone in unfair dismissal cases (ie not with wing members). This will not apply if the case is complex, or there is a lot of factual evidence to go through;
  • Legal officers to deal with certain case management hearings (rather than judges as now);
  • Introducing a system of charging fees before certain claims can be lodged with the Tribunal, as happens now in civil and family matters that are issued before the ordinary courts. This is in part because the Ministry of Justice has been asked to make savings of some £2 billion and to absorb a reduction in their budget of 23% over the next four years. We do not yet know the figures the Government has in mind in this respect;
  • The qualification period before an employee can bring an unfair dismissal claim will be increased from 12 months (as now) to two years;
  • Employers may find themselves being subjected to financial penalties if they are found to have acted in breach of certain employment rights. The monies would not go to the employee – they would go to the Government. The minimum threshold would be £100 and the maximum £5,000 To encourage prompt payment there would be a reduction of 50% if the amount was paid within 21 days.

These are major proposals. The Consultation paper itself asks no less than 64 questions, including a number relating to workplace mediation which is something the Government may in due course look to encourage further. We will undoubtedly be involved in this process and anyone wishing to respond should not hesitate to be in touch with us so we can discuss how to feed in your views.

For more information please contact: Richard Fox

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