Following on from our article “Employment Tribunal system: time for changes?” in the January edition of the Employment Brief, which outlined the current state of the Employment Tribunal system and the Government’s suggested reforms, the Government has now launched its long awaited consultation paper, “Resolving Workplace Disputes”.
The consultation paper sets out in more detail the Government’s proposals for reform and seeks the views of businesses, social enterprises, individuals, trade unions, representative bodies and other interested parties.
The Government believes that more should be done to support and encourage parties to resolve disputes earlier in the workplace if possible, with a view to preserving the working employment relationship. In respect of those cases where the employment relationship has broken down, the Government is keen for cases to progress more quickly to a conclusion in order for costs to be kept to a minimum.
Should you wish to view the full consultation paper or wish to respond to any of the proposals outlined in the consultation, a copy is available to download on the BIS website. The consultation closes on 20 April 2011.
The key proposals are as follows:
- Increasing the qualifying period for unfair dismissal claims from one year to two years.
- Claimants are to submit all disputes to ACAS before bringing a claim to the tribunal.
- Claimants are to pay a fee in order to lodge a claim at the tribunal.
- Power to be given to the tribunals to strike out or order a deposit at any stage, possibly without a hearing but subject to a right of review.
- The permitted level of costs orders without requiring a detailed assessment to rise from £10,000 to £20,000.
- Financial penalties up to £5,000 to be awarded against employers, in addition to damages, in the event that they lose a case.
We summarise below some of the key provisions that may be of interest:
Mandatory pre-claim conciliation
In relation to the proposal that all employment disputes must be mandatorily submitted to ACAS before a Tribunal claim can be issued, it is proposed that Claimants will be required to submit a short-form ET1 to ACAS within the normal time limit for presenting their claim. The clock for the applicable time limit will be stopped upon receipt of the claim by ACAS. ACAS will then be given a statutory period of one month to attempt to conciliate the claim. It will be compulsory for both parties to engage in this process. How an already over-stretched ACAS will have the resources to conciliate effectively in this way remains to be seen. However, once the claim progresses to the tribunal stage it is intended that ACAS will no longer be under a duty to conciliate.
The consultation paper does not put forward any proposals for the actual fees to be charged, and there will be a separate consultation on fees in Spring 2011.
Power to strike out or order a deposit
In relation to the proposed power for tribunals to strike out or order a deposit at any stage, at present, the tribunal can only strike out claims on the basis that they have no reasonable prospect of success where appropriate notice has been issued to the affected parties and only then at a hearing before a Judge (a “pre-hearing review”), not at case management discussions or on paper.
However, the Government is proposing that the power to strike out weak cases should be available to the tribunals at any hearing, rather than exclusively pre-hearing reviews, and also on paper without hearing the parties or allowing them the opportunity to make representations.
It is also proposed that Respondent employers should be able to request an employment Judge to consider a claim form from the outset. This would allow an employer to submit an abbreviated ET3 response form to the tribunal, either stating that the Claimant has not provided sufficient information to justify the claim continuing, or that the claim should be struck out on the ground that it has no reasonable prospect of success or any other appropriate grounds.
Penalties against unsuccessful employers
Whilst the majority of the consultation paper is seen to be “employer friendly”, the Government’s proposal to bring in financial penalties against employers in the event that they lose a claim has arguably caused the greatest stir amongst employer businesses.
The financial penalty is intended to be in addition to any damages to be paid by the employer and is intended to be based upon the total amount of the award made by employment tribunal. There will be a minimum threshold of £100 and a maximum cap of £5,000. If payment is made within 21 days, the penalty will be reduced by 50% so as to encourage prompt payment.
The penalty would be payable to the Exchequer, rather than the Claimant, and this is intended to cover the costs incurred by the system as a result of the employer’s failure to comply with their obligations.