The coalition Government has recently announced a major review of the way that employment disputes are resolved. Although Employment Tribunals, created in the 1970s, were designed as a low cost and accessible way of resolving workplace disputes, in recent years the number of claims has dramatically increased and employers have complained of the very substantial costs that they incur in defending claims – many of which are, in our experience, entirely without merit.

The highlights include:

  • Increasing the ordinary qualifying period for bringing an unfair dismissal claim from 1 year to 2 years.
  • Requiring all claims to be submitted for conciliation before they can be issued and encouraging workplace mediation.
  • Requiring employees to pay a fee for issuing a claim or before allowing it to proceed to a full hearing.
  • Requiring employees to provide more detailed information about the nature of their claim and their losses at the time they issue the claim. This will make claims easier to respond to.
  • Developing a system whereby offers of settlement made by the employer can be taken into account when awarding compensation or assessing whether to make an award of costs. This is similar to the rules that apply in the civil courts whereby a party can be penalised if they unreasonably fail to accept an offer made by the other party and then go on to lose their claim or recover less than the amount offered.
  • Increasing the number of claims which will be heard by an Employment Judge sitting alone (i.e. without the two lay tribunal members who currently make up the three person panel) to include most unfair dismissal claims.
  • Increasing the power to require employees to pay a deposit before continuing with weak cases and doubling the maximum size of the deposit from £500 to £1000.
  • Making it easier for weak claims to be struck out without the cost and expense of a full hearing.
  • Doubling the current limit on the amount of costs that may be awarded against a party where, for instance, it has acted "vexatiously, disruptively or unreasonably" or where the bringing of the claim was misconceived. The limit is currently £10,000 and the proposal is to increase it to £20,000.

Whilst the bulk of the changes are good news for employers there is a sting in the tail. The Government propose that employers who are found to have breached an employee's rights will face a fine of up to £5,000 payable to the Government. This would be in addition to the remedies already available to the employee which are mainly but not exclusively compensatory in nature.

The proposals are all subject to a detailed consultation exercise and much of the detail has yet to be fleshed out.