Price Tag for Employees? (It’s all about the money, money, money)

Why are employers unhappy?

A common complaint by employers is that they are frequently held over a barrel when it comes to employment tribunal claims.  At the moment, it is relatively easy for an employee to lodge a claim against an ex-employer.  The claim form can be submitted online and there is no requirement for the employee to pay a fee.  By comparison, employers are compelled to resist such claims, regardless of the merits of the claim.  Additionally, since very few claims are struck out before proceeding to an evidential hearing, employers occasionally find that it is cheaper to pay an economic settlement sum to an ex-employee, rather than run a hearing and obtain a successful judgment.

What is the Government doing about this?

The Government is currently consulting on a number of employment law reforms.  One of these reforms is a review of the employment tribunal rules.  The current proposal includes a set of tribunal rules which are easier to understand, particularly for non-lawyers, and includes a framework which potentially allows more employee claims being struck out by an Employment Judge before reaching the tribunal hearing stage.

What is included in the proposal? 

These proposals include:

  1. The payment of a fee by the employee who is lodging the claim.

At the moment, an employee can lodge a claim form without having to pay a fee.  This is potentially going to change.  The level of fee for an employee lodging a claim is likely to be between £150 and £250.  Until this fee is paid, the tribunal will not accept the claim form.  By comparison, the employer is not being required to pay a fee, unless the employer is making a counter-claim against the employee.

  1. An initial sift by an Employment Judge.

At the moment, a case will ordinarily proceed to an evidential hearing unless either side requests that the other side’s claim is struck out.  This is also potentially going to change.  The Employment Judge is potentially going to be permitted to consider whether any aspects of a claim lacking a reasonable prospect of success should be struck out.

  1. Early ACAS involvement.

It is proposed that, when a claim is lodged, certain prescribed information will need to be submitted to ACAS to allow for pre-claim conciliation.  Only when it becomes clear that no settlement can be reached will the ACAS officer issue a certificate allowing the claim to proceed.

When are these changes likely to take effect?

The consultation period will conclude on 23 November 2012. This means that any proposed changes will not likely take effect until 2013 at the earliest.

Will these changes improve matters for the employer?

Only time will tell whether or not these changes will improve the tribunal experience for employers.  However employers should keep themselves informed of these developments over the next few months and ensure that, if they are unlucky enough to receive a claim form through the post, they take legal advice as soon as possible.

Simon Allison
Business – Employment Law

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