Employment Law Changes
This summer has seen some radical changes in the ever evolving area of employment law.
Employment Tribunal Fees
For the first time claimants will have to pay fees to submit a claim and have a hearing at an Employment Tribunal. From 29 July 2013 claims relating to unpaid wages and redundancy payments require an issue fee of £160 and a hearing fee of £230. Unfair dismissal, discrimination and whistleblowing claims will require an issue fee of £250 and a hearing fee of £950. Claimants on benefits and low incomes can apply to the Government for full or partial remission of fees. The assessment of each claimant’s means is likely to delay significantly the initial processing of claims. It may be many months before an employer knows whether a claim has been brought. The new fee regime has faced considerable public and political backlash and it remains to be seen what impact it will have on tribunal claims.
Unfair Dismissal Compensatory Limit
There has for many years been a statutory cap on the amount of the compensatory award that a tribunal can award to a claimant in a successful unfair dismissal claim. The cap is increased each year in line with inflation and is currently £74,200. The Government has for the first time introduced an additional cap of one year of a claimant’s gross pay. The cap is now the lower of the statutory amount of currently £74,200 or one year’s gross pay.
Compromise Agreements are renamed Settlement Agreements
Statutory compromise agreements have acquired a new name. From 29 July 2013 they became known as settlement agreements.
The Government has also legislated for the without prejudice negotiations that often accompany a potential dismissal. From 29 July 2013 evidence of pre-termination negotiations between an employer and employee is inadmissible before a tribunal in unfair dismissal claims, unless there has been improper behaviour on the part of either party. This essentially extends the old rules on without prejudice communications. Previously, such communications would only be regarded as inadmissible in cases where there was a pre-existing dispute between the employer and employee. The new rules do not apply to automatic unfair dismissal, discrimination, harassment or breach of contract claims. This raises the question of whether the new rules will have any real impact in practice, given that unfair dismissal claims often also involve claims relating to discrimination and/or breach of contract.