Employment Law and Employment Tribunal Changes 29th July 2013

Today marks the the biggest changes in Employment Tribunals since they were established. Our expert employment law solicitors set out below the main changes. The changes will affect many small businesses in Leicester and all employees.

The following changes to employment law and procedure will take effect:

  • new employment tribunal procedure rules, and the introduction of tribunal and EAT fees
  • a change to the cap on the unfair dismissal compensatory award
  • renaming of compromise agreements as settlement agreements
  • inadmissibility of pre-termination negotiations and the new Acas Code
  • changes to interest on tribunal awards

New Employment Tribunal Procedure Rules

Most of these changes are for us as specialist employment lawyers to know about and so as our client you should not need to be too concerned about the fact that Rule 1 is now Rule 8, etc.

However, if you are an employee and want to bring a claim against your employer then you will now (unless exempt) have to pay fees both to issue an employment tribunal claim and to have a hearing. The fees depend on the type of claim.

  • Type A claims will cover straightforward claims, such as unpaid wages, redundancy pay, holiday pay and notice pay. You’ll have to pay £160 for the issue fee to start the claim, and £230 for the hearing fee.
  • Type B claims will cover more complicated claims such as unfair dismissal, discrimination, equal pay and whistle blowing. You’ll have to pay £250 for the issue fee to start the claim and £950 for the hearing fee.

Most claims that our employment lawyers deal with from our offices in Leicester, Coalville and Blaby will fall under Type B claims.

There are no fees for Employers to pay however it seems likely that where cases are defended and lost, the Employer may be ordered to reimburse the Employees fees on top of any award made.

As with employment law matters generally, while the system was created to exclude lawyers, it is very important that you obtain good legal advice on whether you have a claim/defence at an early stage in order to reduce the risk of incurring fees unnecessarily.

Cap on the Compensatory Award

An award of compensation for unfair dismissal generally consists of a basic award and a compensatory award. The compensatory award is such amount as the tribunal considers just and equitable in all the circumstances having regard to the loss sustained by the employee as a result of dismissal and in so far as that loss is attributable to actions of the employer. It is intended to compensate the employee rather than to punish the employer.

From 29 July 2013, the compensatory award for unfair dismissal will be capped at the lower of:

  • 52 times a week’s pay for the claimant, and
  • £74,200 (the figure increases each year).

This is great news for small businesses as it will stop employees from being sacked and then seeking over a full years pay because of the dismissal.

Settlement Agreements (ex Compromise Agreements)

With effect from 29 July 2013, compromise agreements will be known as Settlement Agreements. We have a dedicated website for settlement agreements in Leicester which explains what a settlement/compromise agreement is and how we can help negotiate it with your employer.

Aside from a name change, there is no real substantive change to the law on compromise agreements. Our expert compromise agreement solicitors can advise businesses on giving their employees settlement agreements in order to “pay them off” and avoid Employment Tribunal Claims. Our solicitors can also advise employees on settlement agreements from any of our offices in Leicestershire.

Pre-termination Discussions

Pre-termination discussions are effectively “off the record” chats between Employers and Employees which by law are now not admissible in evidence.

Effectively, these discussions allow an employer to tell their employee that they want them to leave, perhaps inviting them to agree a settlement agreement, without fear of reprisal. They are not intended to be a tool for bullying or being forced out, but we expect they will be used that way.

We would always recommend that you take legal advice from our employment law solicitors before carrying out any actions where employees are concerned.

Changes to Interest Paid

Tribunal Awards now need to be paid within 14 days to avoid interest accruing.

 

We trust that this guide to the July 2013 Employment Tribunals is helpful. However, whether you are a business wanting expert commercial employment law advice or an employee wanting specialist advice on bringing an employment tribunal claim, please get in touch.