Fees in Employment Tribunals

In an effort to move the burden of funding the employment tribunals (which adjudicate statutory employment claims in the UK) away from the taxpayer and onto those using the service, fees were introduced into the tribunal system with effect from July 2013. Claimants now have to pay fees at two stages: upon issuing their claim a fee is payable of either £160 or £250, depending on the complexity of the claim; at a later stage prior to the full hearing a fee is payable of either £230 or £950, again depending upon the complexity of the claim. The employment tribunal will have the power to order the unsuccessful party to reimburse the fees of the successful party. Claimants will be excused from paying fees if they provide proof either that they are in receipt of certain permitted state benefits, or that their household income is below a certain threshold. It is hoped that the introduction of fees will deter claimants from bringing poor claims and encourage the early settlement of disputes.

Cap on Unfair Dismissal Compensation

The cap on compensation for unfair dismissal has been changed to the lower of £74,200 or 52 weeks’ gross pay, effective July 29, 2013. Historically, the cap on compensation for unfair dismissal has been a pure monetary amount with no reference to earnings. For many years the median compensation awarded by the tribunal for unfair dismissal has been around £5,000, so the revised limits may not always be relevant, save where a lower paid employee seeks to recover loss for an extended period of employment.

Confidential Pre-Termination Discussions 

From July 29, 2013, discussions between employers and employees about terminating employment (known as “confidential pre-termination discussions”) may not be relied upon by either party in a subsequent unfair dismissal claim. Previously, such discussions were only confidential if they were "without prejudice", in other words, if there was a dispute in existence between the parties and the discussion was had in a genuine attempt to resolve that dispute. The new regime is intended to make it easier for employers and employees to discuss parting ways by enabling a truly “off the record” dialogue to be commenced without the need to establish a dispute.

There are, however, some important exceptions to the new rule:

  • Excluded claims: Confidential pre-termination discussions are only protected in relation to "normal" unfair dismissal claims. They will be admissible as evidence in the many potential claims arising from dismissal other than "normal" unfair dismissal, such as claims for wrongful dismissal and breach of contract, as well as (potentially highly valuable) discrimination claims.
  • Improper behaviour: In conducting pre-termination discussions, the parties must not engage in “improper behaviour”, such as unlawful discrimination and all forms of harassment, bullying and intimidation, physical assault, and putting undue pressure on the other party. In cases of improper behaviour the employment tribunal will have to determine on the basis of what is just the extent to which the relevant discussions can be excluded from the employee’s claim.

Changes to Whistleblowing Legislation

In June 2013 some important changes were made to the UK whistleblowing legislation (which provides for a right to compensation if an employee is subjected to a detriment because of, and for dismissal to be automatically unfair if an employee is terminated due to, whistleblowing):

  • Public interest: In order to qualify for the protection of the whistleblowing legislation, disclosures must, in the reasonable belief of the worker, be made in the public interest. This is designed to prevent workers from making a whistleblowing claim at an employment tribunal in respect of purely private matters. 
  • Good faith: The previous requirement for a disclosure to be made "in good faith" has been removed. However, where a disclosure is not made in good faith, any compensation the employee recovers may be reduced by the employment tribunal by up to 25%.
  • Victimisation: The Government has sought to provide greater protection from victimisation for whistleblowers by making employers vicariously liable for detrimental treatment towards the whistleblower by other workers.

Dismissal for Political Opinions or Affiliations

Following a finding by the Court of Justice of the European Union in Redfearn v United Kingdom in 2012 that the UK was in breach of the European Convention on Human Rights, section 108 of the Employment Rights Act 1996 has been amended to provide that the qualifying period needing to be satisfied to be able to claim unfair dismissal (currently of two years) does not apply if the reason (or, if more than one, the principal reason) is, or relates to, the employee's political opinions or affiliation.

Changes to Collective Redundancy Consultation

On April 6, 2013, there were three key changes to the rules on collective consultation:

  • Timetable: Where an employer is proposing to dismiss 100 or more employees at one establishment within 90 days, it must now begin consulting with the appropriate representatives at least 45 days before the first dismissal takes effect. This represents a reduction from the previous requirement to consult for 90 days before dismissal. 
  • HR1: Where an employer is proposing to dismiss 20 or more employees at one establishment within 90 days, the employer must notify the Secretary of State of its redundancy proposal, using an “HR1” form. In the case of 20-99 redundancies, the Secretary of State must be notified at least 30 days before the first dismissal takes effect. However, where 100 or more employees are being dismissed, the Secretary of State must be notified at least 45 days before the first dismissal.
  • Fixed term employees: Where an employer is proposing to dismiss 20 or more employees at one establishment within 90 days, the collective redundancy consultation obligations will not apply to those individuals who are employed under a fixed term contract unless (a) the employer is proposing to dismiss the employee as redundant; or (b) the dismissal will take effect before the expiry of the specific term, the completion of the particular task, or the occurrence (or non-occurrence) of the specific event that the employee was employed for.

In a 2013 decision the Employment Appeal Tribunal held that the requirement for the dismissals to be “at one establishment” should be disregarded as it is incompatible with the European Directive from which the UK registration derives. That decision has been appealed to the Court of Appeal.