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Important Changes to Employment Tribunals From Next Monday

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Employment Tribunal procedures are being significantly overhauled from 29th July 2013.  Below is a summary of key developments and what they mean in practical terms.
 

  • Tribunal Fees - Claimants will have to pay an issue fee to bring claims which will be categorised into Type A for simple claims e.g. wages - or Type B for most others such as Unfair Dismissal and Discrimination. Issue fees are £160 and £230 respectively. Claimants will be required to pay a ‘hearing’ fee of £250 and £950 respectively. Employers will only need to pay fees in very limited circumstances.
  • Awards Cap - A cap of 52 weeks’ pay on unfair dismissal compensatory awards in addition to the current cap of £74,200.
  • Pre-termination Discussions - Employers will be able to hold “pre-termination” discussions with employees in the knowledge that the discussions cannot be used as grounds for constructive dismissal claims. 
  • Costs – the current £20,000 cap that can be awarded will be removed - enabling Tribunals to consider higher costs applications ‘in detail’ rather than referring the matter to the County Court.
  • ‘Substantive Defect’ Rejection & Paper Sift – Tribunal Clerks will be able to refer Claim Forms or Response Forms to a Judge to be rejected, if it appears there is a ‘substantive defect’ e.g. the claim or defence cannot be sensibly interpreted.
  • Deposit Orders – Employment Judges will have greater flexibility to issue deposit orders of up to £1,000 where a specific allegation or claim has little reasonable prospect of success.
  • Preliminary hearings – will replace case management discussions as well as pre-hearing reviews meaning that all preliminary issues can be dealt with at just the one hearing rather than undergoing two potential separate hearings.

What do the changes mean in practical terms?

The changes overall are more beneficial to employers, particularly as the fee requirements make it potentially more difficult for Claimants to get claims off the ground, and the lower cap on awards.

However, the rules provide for a ‘remission’ system whereby fees would be waived for Claimants where, for example, they receive welfare benefits or have little or no means at their disposal, which will assist Claimants who have limited resources.

The Employment Judge will have greater power and flexibility to strike out unmeritorious claims more easily - and without the need for multiple hearings.

Although the fee system was introduced to reduce the number of unmeritorious claims, it remains uncertain whether the changes will achieve this. What is certain,  is that these changes will require employers to rethink termination strategies in terms of the risk of claims and when negotiating compromise agreements (soon to be called ‘Settlement Agreements’). 

If you would like to discuss the implications of the rule changes or termination strategies, please contact Andrew Lightburn on 0113 399343 or andrewlightburn@hlwkeeblehawson.co.uk or ask for another member of the Employment Team.

 

 

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