UK: PDQ - Tribunal Reform: A New Beginning?

The Government yesterday unveiled plans to reform the way employees can bring claims before the Tribunal system. This announcement is against the backdrop of an unprecedented increase in Tribunal claims being brought against employers. The Government stated they were responding to legitimate concerns raised by employers that the Tribunal system has become too costly (for the employer!), the process is too slow and it is too easy for employees to bring unmerited or vexatious claims. The Government believes that its new proposals (which will be the subject of consultation until 20 April 2011), if implemented, will reverse this trend.

The new proposals include as follows:

  • employees will no longer have the right to claim unfair dismissal after working for one continuous year; this right will only exist once they have completed two years' continuous service;
  • all employment claims will have to be lodged first with ACAS in an attempt to encourage parties to consider other forms of early dispute resolution such as mediation;
  • considering formalising offers to settle which may be more akin to the Part 36 system that operates under the CPR 1998;
  • there will be an increase in the number of categories of cases that can be heard by a single judge;
  • introducing automatic financial penalties for employers found to have breached employment rights, on top of the ordinary compensation already payable - the penalty (subject to an upper ceiling of Ł5,000) would generally be half the amount of the total award made to the claimant, and would be payable to the Exchequer;
  • witness statements may be taken as read; and
  • there will be a fee charged to lodge employment tribunal claims.

The Government has also published an 'Employer's Charter' to outline what employers' responsibilities are. This is based on what Vince Cable states is a 'common misconception that employment protections are all one-way - towards the employee'. The 'Employer's Charter' does, however, make a number of sweeping general statements without reference to the detailed rules that govern the management and dismissal of employees. Any employer that places too much reliance on the 'Charter' in its dealings with employees is likely to find itself exposed to a barrage of Tribunal claims.

Comments

The proposed decision to increase the service length for unfair dismissal is controversial and may not, in any event, have the desired result. Protection against discrimination and 'whistleblowing' are not subject to length of service. The number of claims where allegations of such unlawful conduct on the part of employers are made continues to rise.

Naturally, for all those businesses who have been involved in dealing with the increasingly pedestrian system that currently exists, any measures that lead to a more efficient Tribunal system will be welcomed with open arms. There is without doubt a need to sift out unmerited or vexatious claims, but such claims are still made regardless of the length of service. The proposal to introduce more flexibility in the power to strike out or issue deposit orders will be of more importance.

The most crucial element is to speed up listing times and reduce hearing lengths to restore credibility to what is fast becoming a heavily criticised forum. Those measures which assist in speeding up the process should help. Nevertheless, whilst one can never guarantee that employees (both past and present) will not bring claims; the most prudent course of action is for employers to ensure that they always identify a fair reason for dismissal and follow the correct procedure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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