Recently there has been a significant legislative change to employment law rights and to the employment tribunal system. Of which there are three main changes that especially business owners need to be made aware of.
1. Settlement Discussions:
From 29th July 2013, a new law allows an employer to hold pre-termination negotiations or protected conversations with an employee to make an offer for the employment to come to an end on agreed terms. Thus the employee will not be able to use the offer as evidence against the employer in any subsequent employment tribunal claim for unfair dismissal.
Previously, these conversations and negotiation could only be without prejudice (off the record) if there was a pre-existing dispute between employer and employee in relation to the employment.
However this new law, is an attempt to reduce the problems of the without prejudice rule. Therefore regardless of whether or not an employment dispute exists, discussions between employee and employer which are intended to bring the employees employment to an end will be confidential in subsequent unfair dismissal proceedings.
Importantly pre-termination negotiations are confidential in unfair dismissal claims only. Discussions therefore can be used as evidence in other employment tribunal claims.
It is thought that many employers have been waiting for this change to settlement discussions, as a chance to opt out of their internal procedures, a way to get rid of those troublesome employees.But this new law simply adds to the uncertainty in regards to the stability of employment especially after the vast increase of redundancies.
2. Unfair dismissal awards:
Compensation claims for unfair dismissal will now be capped with a new limit on the unfair dismissal compensatory award (for loss of earnings) as effect from 29 July 2013. The new limit will either be the lower of £74,200 (the current limit) or 12 months pay.
Any claim where the effective termination date is on or after 29 July 2013 will be affected by this new rule.
This change to compensation is thought to be good news for employers. Not only does it mean a reduced financial exposure on unfair dismissal claims but also provides greater certainty, for employer and employees over the maximum compensation that can be awarded.
Most of these claims are resolved by ACAS conciliation, whilst others are either withdrawn or unsuccessful and only less than a quarter of employee claims are thought to be successful as shown by recent statistics from the department for business.
3. Tribunal fees:
The introduction of tribunal fees have been the most radical thing to happen to employment tribunals since their inception.
Tribunal fees are those fees that employees must pay when submitting an employment tribunal claim and when the claim is listed for a final hearing. From the changes that have come into force, depending on the complexity of the case, employees will have to pay a minimum of £390 fees for simple claims such as unlawful deductions and redundancy payments, which could rise to £1,200 for more complex claims such as unfair dismissal or discrimination. This is unless they are unemployed or have insurance cover or funding from their union.
If an employee is making a claim with more than one person, a higher fee will be payable depending on the number of persons making the claim.
Other than those fees for starting a claim and for a hearing, fees may also be payable for other applications, such as an appeal to the tribunal.
If the employee wins, the former employer will normally be ordered to pay back any fees that the employee has paid, in addition to any compensation.
If however the employee looses the claim, the tribunal will have the power to order the employee to reimburse any fees paid by the other side. But the tribunal can decide whether or not the employee will have to do this on a case-by-case basis.
Conclusion
Employment law changes are something we should be aware of. In order to comply, we need to fully understand what the laws entail so that we can formulate a win-win arrangements with our employees. Moving forward, you should consider consulting with a reputable legal consultant, such as Rodney Hylton-Potts, to make sure that you are doing the right thing with your company policies.
About the Author: Sameer Karim is the senior partner at DWS Solicitors, a firm with an Excellence in Client Service award from the Law Society of England & Wales. He specialises in employment disputes and property litigation. In his spare time he enjoys playing golf and travelling.
