July 2013 Employment Law Changes

The end of July is unusually busy, with the introduction of two important changes to employment legislation.

Introduction of employment tribunal fees

As of 29 July 2013, claimants who issue a claim against their employer in an employment tribunal will be required to pay a fee. There will be two levels of claim: Type A and Type B claims, depending on the complexity of the case. The claimant will also have to pay an initial fee to issue a claim and a further fee if the claim goes forward to a hearing. Type A claims are simple, uncomplicated claims such as unlawful deduction of wages, statutory redundancy payments etc whereas Type B claims are for most claims including unfair dismissal, discrimination and whistle blowing. Type A claims will have an issue fee of £160 and a hearing fee of £230, while Type B claims will have fees of £250 and £950 respectively. If the claimant is successful with his or her claim, then the tribunal may order the fees to be repaid to the claimant. Fees are also payable for appeals submitted to the Employment Appeal Tribunal.

This plan to introduce the tribunal fees is controversial and has been opposed by the trade union, Unison, and by a Scottish law firm called Fox and Partners, both of whom have launched campaigns to have a Judicial Review of the fees. With the implementation date imminent, employment tribunal fees will go ahead as planned and, if they are subsequently found to be unlawful, refunds will be made to those who have paid the fees.

Full details can be found on the website www.justice.gov.uk. 

As a result of the new fee system, new forms will be introduced for employees to submit their claim and employers to defend the claim. As claims will not be accepted without payment (or an application for fee remission in the case of financial hardship), employment tribunal claims will take longer to process.

Settlement agreements and pre-termination negotiations

The new statutory provisions on settlement agreements and pre-termination negotiations will also come into force on 29th July 2013. Essentially, this means that the employer and employee will be prevented from referring to pre-termination negotiations in their evidence in relation to unfair dismissal claims. If an agreement is reached in pre-termination negotiations, this agreement will be called a settlement agreement (known as compromise agreements prior to 29 July). Settlement agreements will allow employers to offer compensation to an employee as a part of a mutually agreed settlement to end employment where the employment relationship has broken down. Evidence in relation to these negotiations cannot be used in a subsequent claim made against them.

Although this change will give employers more flexibility in dealing with difficult situations with their employees, great care should be taken in order to ensure that such negotiations are handled sensitively and in a way that affords maximum protection to the employer.

Further information on having these ‘protected conversations’ can be found on the ACAS website.

Simply-Docs will be updating its documents to take account of these changes.