Government shake up of employment tribunals

Employment tribunal changes have come into effect intended to make it easier for businesses to take on staff and improve the process when staff have to be let go.

There were 218,000 tribunal claims in 2010/11, a rise of 44 percent since 2008/09, with each business spending nearly £4,000 per claim on average defending itself.

The changes, which came into effect on 6th April, are part of a radical reform package that the government says will ultimately deliver direct net savings to UK business of more than £10 million a year with wider benefits to employers estimated at more than £40 million a year.

Among the changes are raising the qualifying period for claiming unfair dismissal from one to two years and increasing the maximum level for costs awarded to businesses winning a vexatious tribunal claim from £10,000 to £20,000. Deposit orders required by claimants when a judge determines that a part of claim is unmerited will increase from £500 to £1,000.

Also from Friday, the average value of awards and time taken to reach a hearing will be included in the guidance for tribunal application and response forms, providing all parties with a greater understanding about what to expect from the tribunal process before they enter the system. The government is also considering whether companies with fewer than 10 employees should be exempt from the tribunals process.

Further changes are in the pipeline. Late last year, the government announced it was planning to introduce fees for taking claims to employment tribunals and employment appeals tribunals, a practice that the Law Society describes as “creating a barrier to justice”.

It is understood that there would be a refund for those who win their case under the changes and that the low-paid, or those without an income, may also have the fee waived or reduced. However, Law Society president John Wotton warned that the scheme will undermine access to justice. “Many people who have just lost their job and are facing financial uncertainty will be unable to pay fees of between £150 and £1,250. The inevitable effect of introducing fees will be to deny such people the right to have their case heard in a tribunal. Access to justice in employment matters will be confined to those with the means to afford these fees.”

The government is currently consulting on its intention to introduce fee-charging.