The last 6 months has been a busy and interesting time in the world of employment law. While the government’s ongoing review continues to identify those areas where it is felt change is necessary, this week sees the first round of new measures coming into force. The changes of note are:
Perhaps most significantly, the increase in the qualifying period required to bring an unfair dismissal claim. Employees who are recruited on or after 6thApril will require 2 years’ service before they acquire the right to bring a standard unfair dismissal claim. Importantly, this change will not have retrospective effect, so employees recruited before this date will still only require 1 year’s continuous service to pursue such a claim.
It is worthwhile bearing in mind that an employee’s statutory notice period will be added to their period of continuous employment, even where the employer elects to make a payment in lieu. This means that, technically, an employee will acquire the right to bring an unfair dismissal claim after 103 weeks’ continuous service (or 51 weeks’ if their employment commenced before 6thApril).
The above increase in qualifying period will also apply to an employee’s right to request a written statement of reasons for dismissal. Accordingly, an employee will require 2 years’ continuous service before being able to compel their (most likely former) employer to provide this. Where such a request is made, the employer will still have 14 days to respond.
From 6th April, it will be competent for an Employment Judge sitting alone to deal with unfair dismissal claims. This alters the present practice of a full tribunal, made up of an Employment Judge and 2 lay members (one with an employer/ business background, the other with experience in employee representation), sitting to determine unfair dismissal complaints. Full tribunals can still be requested and while an Employment Judge will consider whether a full tribunal is required for any particular claim, the onus will be on the parties to make an application if they feel this is necessary. The matters the tribunal will consider when dealing with such an application are:
• The complexity of the facts in dispute;
• The issues of law to be determined;
• The parties views; and
• Whether there are any other claims to be determined along with the unfair dismissal claim. For example, where an unfair dismissal complaint is together with a discrimination claim, a full tribunal will be convened.
It is important for businesses to consider at an early stage in proceedings whether they feel a full tribunal would be more suitable for any case they are required to defend. A number of people (including Employment Judges) believe that lay members bring a significant value to the employment tribunal process and the removal of their expertise will be detrimental.
This change in a tribunal’s constitution will apply to claims raised before and after 6thApril. The Tribunals Service has indicated that the default position (i.e. Employment Judges sitting alone) will be in force for all cases from approximately 20thApril onwards, even if hearing dates have already been fixed, so employers will need to ensure they consider this matter for any cases which have already been raised.
The maximum level of costs which a tribunal may award to a party will increase from £10,000 to £20,000. Costs will still not be awarded as a rule and it is only in the minority of cases where a tribunal will even consider making such an order (the most recent figures show costs were awarded in as few as 0.5% of claims). This increase in the maximum costs award will only apply to claims lodged on or after 6thApril 2012.
Where a party is successful in either pursuing or resisting a claim, they can make a costs application on the basis that the claim which has been raised, or the defence to that claim, is vexatious, abusive, disruptive, unreasonable or misconceived. A costs order will only be made where the party making the application has been legally represented.
There will also be an increase in the level of a deposit order that a tribunal can make. A deposit order requires a party to lodge a sum of money with the tribunal to be able to continue to take part in proceedings. Such an order will be made where the tribunal believe that the claim or grounds of resistance to any claim has little reasonable prospect of success. A tribunal will now be able to order that an amount of up to £1000 be lodged by way of a deposit, this being an increase from the current level of £500. Again, this increase will only apply to new claims raised on or after 6th April.
The annual increases in statutory payments also take effect this week. The new rates will be:
• Statutory Maternity/ Paternity/ Adoption Pay - £134.45 (from 1stApril 2012)
• Statutory Maternity Allowance - £135.45 (from 9thApril 2012)
• Statutory Sick Pay - £85.85 (from 6thApril 2012)
The government is still carrying out significant consultations on a number of other matters, including the introduction of fees (which we are told will happen albeit in a yet to be decided form), the introduction of no fault dismissals and a change in the rules on an employer’s duty to undertake collective consultation. A review of all matters currently under discussion can be found in the recently produced BIS summary. However, it seems certain that this week will only be the starting point of employment law reform and we will continue to keep you updated as and when any further announcements are made.