As Employment Law and HR practitioners, we may well have become immune to the quirks of the employment tribunal. How often do we stop to question the logic of a three-month time period for presentation of a claim, against the backdrop of a 12 month or more wait for a hearing? Still less, do we question the reasons for requiring claims for unfair and wrongful dismissal, arising from the same set of facts, to be heard in two different forums. These anomalies have now come under scrutiny.
Last week, the Law Commission published a consultation paper reviewing a number of aspects of employment tribunal practice and procedure. The focus of the consultation is the “awkward area” of shared jurisdiction between employment tribunals and the civil courts, which we see in breach of contract claims, equal pay claims and even the enforcement of employment tribunal judgments.
Key among the issues for consultation are:
£25,000 cap on damages available for breach of contract claims: No change has been made to the limit on the damages which a tribunal may award for breach of contract since 1994. Adjusted for inflation, the limit should have been increased to roughly £50,000 by now. But is there any logic at all in imposing a restriction when tribunals have the power to award unlimited damages for discrimination or whistleblowing claims? The Law Commission favours increasing the £25,000 limit to at least £50,000 and potentially removing the cap altogether. Such a measure would radically alter the approach to litigating senior employee terminations and would bring bonus claims and, arguably, claims for breach of share schemes or incentive plans within the purview of the tribunal.
Time limits for presentation of a claim: The short time period for bringing a claim (three months in most cases) is a hangover from the early days of the industrial tribunal, when the forum provided a speedy and informal resolution to disputes. Three months for presentation of a claim now seems anomalous in the context of claims which can be multi-day, complex, and high value and, in respect of which, there may be a delay of several months before a hearing. The Law Commission proposes an extension of the time period for presentation of a claim to six months, and, in the case of equal pay claims, up to six years, to align with the civil court time limit. This approach would not find favour with many employers, who value the ability to draw a line under contentious terminations after three months, if the employee has taken no action.
The consultation addresses other features of tribunal procedure, such as the requirement for unlawful deductions claims to be for quantifiable sums, the appropriate forum for goods and services discrimination claims and the absence of power for the employment tribunal to enforce its own judgments.
The consultation remains open until 11 January 2019. Regardless of the outcome, the consultation offers a refreshing perspective on the many idiosyncrasies of the tribunal system, which we tend to take for granted.