Government sets out proposals on employment tribunal reform

The Government has launched a consultation on reforms to the employment tribunal system to reduce the number of claims. Proposals include extending the qualification period for employees to bring a claim of unfair dismissal from one to two years and introducing a fee for bringing a claim. 

The consultation, published jointly by the Department for Business, Innovation and Skills and Tribunals Service, concentrates on the following issues:

  • Mediation and conciliation.  The consultation identifies how the use of early dispute resolution can be encouraged, including increasing awareness of mediation and realistic expectations of what employment tribunals can award. The Government proposes a new requirement that all claims be submitted to Acas in the first instance, rather than the Tribunals Service. Pre-claim conciliation would not be mandatory but, even when the parties do not choose conciliation, there would be an opportunity for Acas to give them advice (for example, on the chances of success at a tribunal and the likely level of award). Claims could only proceed if they have been with Acas for one month. 
  • Tackling weaker cases.  The Government recognises that there have been criticisms that the tribunal system is not efficient in identifying weak and vexatious cases and that this imposes unjustifiable burdens on businesses. The proposals include allowing employment tribunals to strike out employment tribunal claims in a greater range of circumstances. The power to strike out a claim, or any part of a claim, on the ground that it has no reasonable prospect of success should be available to the employment tribunal at any hearing, rather than exclusively at pre-hearing reviews, or without hearing the parties or giving them the opportunity to make representations. Safeguards would be put in place to prevent a party from abusing the striking-out provisions. Employment tribunal judges would be able to order claimants at any stage to pay a deposit of up to £1,000 if they believe that weak claims are being pursued. Currently, judges can order deposits to be paid only in pre-hearing reviews and the limit is £500. In addition, the maximum costs order that can be awarded would increase from £10,000 to £20,000. 
  • Encouraging settlements.  The Government wants to discourage the notion that, once a claim is lodged, the only option is determination by an employment tribunal. The consultation suggests that the tribunal claim form should be amended so as to allow a statement of loss to be incorporated into the ET1. There would be a rule whereby either party can make a formal settlement offer to the other party or parties as part of formal employment tribunal proceedings. This procedure would be backed by a scheme of penalties and rewards, to encourage the making, and acceptance, of reasonable settlement offers. 
  • Simplification of the employment tribunal process.  According to the consultation document, a common criticism of employment tribunals is that cases take too long to hear. It proposes that witness statements should be "taken as read". Unless an employment judge directs otherwise, a witness statement would stand as the evidence-in-chief of the witness concerned and it would no longer be read out in its entirety. The ability of employment judges to sit alone would be extended to cover unfair dismissal cases and more of employment judges' administrative work would be delegated to legal officers. 
  • Fee for bringing an employment tribunal claim.  The Government sets out its intention to introduce a fee for bringing an employment tribunal claim. There will be a separate consultation on this in spring 2011 that will discuss the level of the fee and how the mechanism would work. 
  • Increasing the qualifying period for bringing an unfair dismissal claim.  The Government proposes extending the qualification period for employees to bring a claim of unfair dismissal from one year to two years. Other employment rights that are available from "day one" would be unaffected. 
  • Financial penalties for employers.  The Government is considering giving employment tribunals the power to penalise employers that have been found to have breached an individual's rights, rather than just compensate claimants and uplift the amount of compensation in certain circumstances. This measure is designed to "send a clear message to an employer, and employers more generally, that they must ensure that they comply with their employment law obligations". There would be a cap of £5,000 on any penalty and it would be payable to the Exchequer rather than the claimant. 

The closing date for responses to the consultation is 20 April 2011. 

The Government has also published its "Employer's charter", which "aims to dispel many of the myths about what an employer can and can't do". 


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