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he Coalition has concentrated on examining and reforming existing employment legislation as part of its efforts to encourage business growth and economic recovery. Numerous proposals and reforms have been suggested and the media and public have had mixed reactions. Business Secretary Vince Cable announced a number of proposals to reform employment law in November. The Government’s response to the Resolving Workplace Disputes consultation in relation to reforming the employment tribunal system highlighted a number of intended changes. One of the most newsworthy changes is the increase in the qualifying period for unfair dismissal from one to two years. The Department for Business, Innovation and Skills is yet to make a formal announcement but it is believed that the new two-year qualifying period will only apply to employees who commenced employment on or after 6 April. The one-year qualifying period will still apply to those employed before this date. The Conservative Government raised the qualifying period for unfair dismissal claims from one to two years in 1985 and the qualifying period was once as little as six months. There are differing opinions in relation to the likely success of the change in qualifying period. Many feel that the increased period will lead to employees pursuing claims such as whistleblowing and discrimination where the employee is not required to have accrued the necessary qualifying period of employment. Vince Cable announced that the increase would “give greater confidence to employers in recruiting new employees, without undermining workers’ sense of job security”. Some commentators doubt whether employers genuinely consider the danger of potential claims when hiring new staff. Others say that a year is sufficient time to assess whether the employee is performing to the required level and representing the business in the desired manner. One of the biggest bug bears of employers is that there are no costs involved in the issuing of 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 in December. Two different fee-charging structures were proposed. The first option is the charging of 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. The hearing fee would range from £250 to £1,250. The second option would be payment of an issue fee only. This would range from £200 to £1,750. The proposed changes are significant, 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 to £5,000 is only £120 in the county court. Some contend that the level of proposed tribunal fees will discourage genuine claims in the tribunal. The consultation closed earlier this year, with a view to introduce the fees from 2013-14. A further change introduced in April is that a tribunal judge can now order a party to pay a deposit order of £1,000. The previous maximum possible order 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 was to deter claimants from continuing with frivolous, tenuous claims. Some argue that the increase was a barrier to the pursuit of justice. 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 was increased in April from £10,000 to £20,000. This should dissuade some litigants from pursuing unfounded claims, in the same way as the increase in the amount of potential deposit orders. The government has made it clear that it would like 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 protected conversations will encourage bullying or harassment in private, although the government has stated that discrimination would not be protected. If protected conversations are introduced, employers may 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 may be an attractive option for both parties. There is however some good news for claimants. Tribunal awards were 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. Given the raft of proposed and implemented changes to employment law introduced by this government, they certainly can’t be accused of resting on their laurels in this area. DS
Given the raft of proposed and implemented changes to employment law introduced by this government, they certainly can’t be accused of sitting on their laurels in this area
www.dealersupport.co.uk JUNE 2012
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