Vince Cable, the Business Secretary, has recently announced the UK Government's plans to significantly reform UK employment law. These reforms are likely to have a major impact on the diplomatic community within the UK given the number of local staff embassies and high commissions employ.

Of all the Government's reforms, the introduction of fees for submitting Tribunal claims and the decision to increase the general length of service required to bring a claim for unfair dismissal are probably the most eye catching. However, given that just under a quarter of Tribunal claims last year included a claim for unfair dismissal, it seems unlikely that this measure on its own will produce a dramatic reduction in the total number of claims. Claimants who subsequently do not have the requisite length of service to bring a claim for unfair dismissal may instead claim that their dismissal constituted one or more form of unlawful discrimination, a claim which could be brought from the first day of employment and would be potentially more complex.

A full list of the Government's key proposals for reform are:

  • Doubling the period of service necessary to bring an unfair dismissal claim to two years from April 2012.
  • Requiring all Tribunal claims to be lodged with the government funded Acas conciliatory service in the first instance to allow pre-claim conciliation to be offered.
  • Introducing "protected conversations" to allow employers to raise workplace issues in what is described as "an open way free from the worry it will be used as evidence in ... tribunal".
  • Simplifying compromise agreements.
  • Commencing a fundamental review of Employment Tribunal procedure.
  • Creating a "rapid resolution scheme" as a quicker alternative to
  • Employment Tribunals for less complicated claims such as wages and holiday pay disputes.
  • Introducing fees for submitting Employment Tribunal claims.
  • Extending the jurisdictions where judges sit alone to include unfair dismissal.
  • Providing Employment Tribunals with more power to strike out cases.
  • Increasing the level of deposit the Employment Tribunal can order from £500 to £1,000.
  • Increasing the costs that an Employment Tribunal can award against a party who has behaved vexatious or unreasonably from £10,000 to £20,000.
  • Introducing financial penalties of up to £5,000 payable to the Government on employers who are found to have breached an employee's rights.

This announcement follows the Government's promise in its Coalition Agreement to review existing employment laws, as well as the publication of figures from the Ministry of Justice showing that the number of Employment Tribunal claims which went to a full hearing rose 9% last year. As well as the increase in the qualifying service required to bring a claim for unfair dismissal, the increase in the level of cost awards and deposit orders that can be made by Tribunals will also take effect in April 2012. The Government has yet to publish dates for the implementation of the other reforms.

In relation to the introduction of fees for submitting Employment Tribunal claims, the Government is currently consulting on two options:

  • Option 1: an initial fee of between £150-£250 for a claimant to begin a claim, with an additional fee of between £250-£1250 if the claim goes to a hearing, with no limit to the maximum award; or
  • Option 2: a single fee of between £200-£600 - but this would limit the maximum award to £30,000 - with the option of an additional fee of £1,750 for those who seek awards above this amount.

These fees will be waived where the claimant is on a low income including being in receipt of Jobseeker's Allowance. Business groups have welcomed the proposal as a way of discouraging spurious claims although the Trades Union Congress is concerned that introducing fees will scare off genuine claimants.

As well as these specific reforms the Government has also asked for views on a number of other ideas for change including:

  • The possibility of reducing collective redundancy consultation from 90 days to 60, 45 or 30 days.
  • Introducing "compensated no-fault dismissals" for micro-business (those with 10 or fewer employees).

If the balance of responses received by the Government favours these changes then formal consultation will be introduced.

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