Fines & Fees in the Employment Tribunal?

The government announced its proposals to shake up the Employment Tribunal last week. Some employers see the proposed changes as a lifeline to help combat claims with little merit. However it’s not all good news for businesses. Consultation will go on till the 20th April 2011. Currently the proposals include:

• The minimum qualifying period for unfair dismissal claims to increase to 2 years (from one year at present). The idea is that employers will feel much more comfortable about hiring staff, knowing that they can dismiss them reasonably safely in the initial period. However there would still be a range of claims which can be brought with no qualifying service.
• Claimants will have to pay a fee for lodging claims. Whether those fees would discourage ‘have-a-go’ claimants remains to be seen. Employee groups are likely to argue that Claimants on benefits should be exempt.
• All claims will have to be submitted to ACAS for a month of pre-claim conciliation before proceeding. The new proposals for compulsory ACAS involvement seem sensible, but again how effective that will be in reducing claims is open to question.
• Automatic financial penalties for employers found to have breached employment rights, on top of the ordinary compensation already payable, probably ½ the total award made to the claimant, and payable to the Exchequer. This would be very unwelcome news for employers, who may feel they are already in a lose-lose situation when defending Tribunal claims, and would be likely to force them to settle claims unless the issues are very clear indeed.
• Employment judges to sit alone (rather than in a panel of three) in more cases including unfair dismissal claims where the facts or law are relatively uncomplicated. However many claims are anything but straightforward and claimants would still be likely to press for a full panel where possible.
• Reviewing the level of Tribunal awards. This seems unlikely to have the effect of significantly reducing payments to claimants though.

We will update you when the consultation ends.