Employment Tribunals, the changing landscape

This summer presents us with another changing landscape in Employment Law which will affect all employers regardless of how well they treat their employees. The latest shake up triggered by the review by Lord Justice Underhill of the Employment Tribunal Regulations are not to be ignored. Costs Tribunals are being encouraged to use their powers to award costs against the losing party and this will happen more and more where any claim made in proceedings by either  party has no reasonable prospect of success. Penalties Secondly, from October 2013 a financial penalty of up to £5000 can be awarded by tribunals against employers who breach their worker’s rights or where there are “aggravating factors”. The fine is paid to the Secretary of State. Don’t forget that a worker can be someone who is not technically an employee, such as a temp or agency worker. Rights Employees have to be employed for more than two years before they can bring a claim for unfair dismissal in the Employment Tribunals. However, there is no qualifying period of service for an employee to assert many other rights, particularly in relations to discrimination, maternity rights and whistle blowing. The Underhill review now makes it harder for employees (claimants) in a number of other ways, primarily by introducing the need to pay court fees which have never before been featured in Employment Tribunals. The fees amount to £160 to issue a claim and a trial fee of £230. In more complex cases, for instance where discrimination is being claimed, the initial fee is £250 and the trial fee is £950.  This will deter many claimants except those who have reserves or those who are entitled to remission of fees on account of their means. The new fee regime starts on £29th July 2013 so the tribunals can expect a deluge of claims in the early weeks of July this year! New claims will be subjected to a “sift” by the tribunals before they are sent to Employers. This will sort out those claims which are incomprehensible (and many are!) but the requirements will be much more strict as employees will be expected to be specific about their claims and to set out the amount that they are claiming.  How strictly these requirements will be enforced remains to be seen. Most importantly there will be a new cap on damages limiting claims for loss of earnings to 12 months net pay. This is subject to the existing cap on awards of £74,200. Whilst this change has not yet been implemented, Employment Tribunal judges are already influenced by it. On the surface it would appear that the changes will improve the situation but do not be deceived. The new regime offers many pitfalls for employers.