Shaking up the employment laws
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Employment law changes include weakening unfair dismissal rights and proposed charges for tribunals. Unions are angry, but will employers benefit?
Words: Allison Cook
From this month onwards new employees will have to be employed for two years before they can lodge a claim for unfair dismissal, rather than one year as introduced by the last government. Unions are furious, but the government says the change will give greater conidence to employers.
Other proposed changes include charging fees for lodging a claim at an employment tribunal.
Business Secretary Vince Cable announced proposals to reform employment law last November and the government’s response to the Resolving Workplace Disputes consultation in relation to reforming the employment tribunal system highlighted several intended changes.
The new two-year qualifying period for unfair dismissal will apply only to employees who start employment on or after 6 April 2012; the one-year qualifying period will still apply to workers employed before this date.
More claims?
Many feel that the increased period will lead to employees pursuing claims for unfair dismissal for reasons such as whistle blowing or discrimination, areas where the employee is not required to have accrued the necessary qualifying period of employment.
Some commentators doubt whether employers genuinely consider the danger of potential claims when hiring new staff. Others say that a year is suficient time to assess whether an employee is performing to the required level and representing the business in the desired manner.
Employers have complained that there are no costs involved in issuing employment tribunal claims and as such, no barrier to lodging claims irrespective of their merit or otherwise. The Government recognised this and published its consultation on tribunal fees on 14 December 2011. Two different fee charging structures have been proposed. The irst option is charging an issue and a hearing fee. The amount would depend on the nature of the claim. The issue fee could range from £150 to £250, while the hearing fee could range from £250 to £1,250.
The second option would be payment of an issue fee only, ranging from £200 to £1,750. The proposed changes are signiicant, particularly as the initial issue fee is higher than many issue fees in the County Court. For example, the issue fee for recovery of a debt of £3,000-£5,000 is only £120 in the County Court. Unions contend that the level of proposed tribunal fees will discourage genuine claims.
The consultation closed on 6 March 2012 with a view to introducing the fees from 2013-14.
A further change to be introduced from 6 April 2012 is that a tribunal judge will be able to order a party to pay a deposit of £1,000. The previous maximum possible was £500.
If an employment judge considers that all or part of a claim has little reasonable prospect of success at a pre-hearing review, he or she may make a deposit order as a condition to continue with the claim. The aim of the increase is to deter claimants from continuing with frivolous, tenuous claims, but some argue that the increase is a barrier to the pursuit of justice.
Discouraging vexatious claims
Costs orders are not the norm in tribunal hearings. They are used where the tribunal believes that a party or their representative has acted in a vexatious, disruptive or abusive manner in bringing or conducting the claim. As the government is keen to discourage vexatious claims, the maximum costs order a tribunal can award will increase on 6 April from £10,000 to £20,000. This should dissuade litigants from pursuing unfounded claims.
The government’s intention is to reduce bureaucracy for employers. In pursuing this aim, it plans to consult on the introduction of the concept of ‘protected conversations’, evidence of which would not be admissible at tribunal hearings. There has been strong opposition to this proposal, particularly as without prejudice conversations are already commonplace.
The aim of protected conversations is to encourage frank discussions between employers and employees. Some fear that they will encourage bullying or harassment in private, although the government has stated that discrimination would not be protected. If protected conversations are introduced, employers might fear that an employee will later maintain that the reason for the conversation was because of a protected category such as age, sex or disability. Whether protected conversations survive consultation remains to be seen.
Compromise agreements will also be examined in a further consultation to review whether they are unnecessarily complicated and whether they should be amended so that all existing and future claims are covered. Compromise agreements are widely used to avoid tribunal claims and to protect both the employer and the employee’s reputation, so simplifying their use might be an attractive option for both parties.
There is, however, some good news for claimants. Tribunal awards increased on 1 February 2012. The maximum award for an unfair dismissal claim has been increased from £68,400 to £72,300 for dismissals that occur on or after 1 February 2012. The maximum limit on a week’s pay has also been increased from £400 to £430.
It will be interesting to see what proposals survive consultation and whether the changes implemented achieve the desired results. ■ ● Allison Cook is an associate in the employment department of law irm Veale Wasbrough Vizards. acook@vwv.co.uk
Further Information
Advisory, Conciliation and Arbitration Service: www.acas.org.uk
WHAT THE UNIONS SAY Unite
“The government is engaged in the biggest assault on an individual worker’s rights that there has ever been in the UK,” says a Unite spokesman.
“Changing rules on unfair dismissal and charging for employment tribunals are unfair and will exclude many from justice. These are only the beginning of a raft of proposals to cut employment rights and undermine workers’ ability to enforce those rights. These changes are likely to be discriminatory, hitting the poorest and most vulnerable workers hardest and could be unlawful. Unite will be doing everything to challenge the government on these changes.”
URTU
“The United Road Transport Union [URTU] is appalled at the proposed suggestion that employees’ and workers’ rights are to be cut further by extending the qualifying period for unfair dismissal from one to two years,” says an URTU spokesman.
“A change that forces an employee to wait for two years before they are protected against unfair dismissal will simply encourage bad employment practices and create more insecurity for employees at a time of economic downturn. Such an increase will have a disproportionate effect on women, low-paid employees and young workers. If a dismissal is unfair, it is no less likely to be unfair on day one than it is a year or two years later. The concept of unfair dismissal is just that.
“Charging a fee for registering an employment tribunal claim, at any level, will undoubtedly prevent poorly paid workers and those who are unemployed as a result of dismissal from registering a claim, however meritorious. This is a denial of access to justice. The employment tribunal system is based on the premise that employees should not be deterred from bringing cases. This will undoubtedly end through a fear of having to pay an ‘upfront’ fee to bring a claim.”