The Government has recently been under increasing pressure to come up with a credible growth strategy, especially in light of the negative growth to the economy in the last quarter of 2010. Contrary to its efforts to project the UK as a business-friendly environment, employment regulations are increasingly being seen as potential barriers to growth and job creation. The annual cost of conflict in the UK is estimated to be £24 billion, with the average worker spending 1.8 hours a week dealing with conflict-related issues. Many business representative bodies have also raised concerns regarding the length of time that cases take to be heard, their costs and the increasing number of weak and vexatious claims being brought against employers because of any lack of disincentive to do so. These proposals are an attempt by the government to reduce the number of cases brought to the tribunals and to reduce the time and costs for those that do proceed to a full hearing.
The main proposals are:
- Increasing the qualifying periods for unfair dismissal from one to two years.
- Requiring all claims to be submitted to ACAS in the first instance for up to one month for them to offer pre-claim conciliation.
- Making the power to strike out claims that have ‘no reasonable prospect of success’ more flexible and increasing the deposit and cost limits for weak and vexatious claims from £500 and £10,000 to £1000 and £20,000 respectively.
- Requiring claimants to provide additional information about the nature of the claim being made and to include a statement of loss as required information.
- Removing the limited existing right for parties to claim reimbursement from the tribunal for travel and other expenses.
- Shifting case management responsibility from the judges to suitably qualified legal officers.
- Introducing a fee-paying structure whereby parties are to contribute to the cost of running the tribunal.
- Introducing automatic fee penalties for employers found to have breached employment rights, potentially up to a maximum of £5000.
- Removing the requirement for tripartite panels in the EAT to allow judges to sit alone, thus allowing more efficient use of lay member resources.
- Reviewing the formula for calculating employment tribunal awards and statutory redundancy payment limits.
If and when implemented, these proposals are intended to encourage parties to attempt to resolve disputes internally rather than to use the tribunal service. In conjunction with these proposed reforms, the Government is also considering the introduction of a mediation system whereby a mediator could be called in to resolve disputes amicably and in a cost-effective manner. As the proposals are now being consulted upon, future DechertOnPoints will provide updates on the timing and eventual detail of these proposals as and when they come into force.