Changes to UK laws aim to further curb number of cases going to employment tribunal

Out-Law News | 07 Apr 2014 | 4:44 pm | 3 min. read

Employees with a grievance against their employers will have to consider participation in a dispute resolution scheme run by the Advisory, Conciliation and Arbitration Service (Acas) before they can lodge a claim before an employment tribunal under changes to UK law that have come into force.

The changes, which came into effect on 6 April but which are only mandatory for claims submitted on or after 6 May, require employees to tell Acas that they intend to bring a tribunal claim against their employer. The notification triggers an 'early conciliation' scheme where Acas will attempt to resolve disputes between employers and employees at a pre-tribunal stage.

However, the changes to the law do not require individuals or businesses to settle a case through the scheme. Where disputes cannot be resolved through the early conciliation scheme, employees will obtain a certificate from Acas to allow them to proceed with the tribunal process.

"It remains to be seen whether claimants and their employers will actually engage properly in the early conciliation process," said employment law expert Selwyn Blyth of Pinsent Masons, the law firm behind Out-Law.com. "Acas conciliation will remain an option for disputing parties even if cases proceed towards a tribunal hearing, so the early conciliation scheme will not offer the only opportunity to settle cases."

"In many cases it is difficult to get parties in dispute to focus on settling cases until further into the process, where employers and (ex)employees get into the substance of claims and their relative merits. At an early stage many of the arguments will be heard in abstract and positions will generally be quite entrenched," he said. "However, in some cases where employers know they have done something wrong, perhaps as a result of a rogue manager's actions, they may welcome an early opportunity to seek a settlement and avoid incurring legal costs."

In less clear cut cases some employers may be inclined to test claimants' resolve and their willingness to pay a fee to bring cases to tribunal and only engage to a minimal extent with the early conciliation process, Blyth said. However, he said that there would be an element of risk in adopting such an approach.

"If a claimant could show that their employer had failed to engage properly in the various procedures during their case, including with the Acas early conciliation scheme, they could ask the tribunal to order the employer to pay some of the costs incurred in bringing the claim," Blyth said. "This risk would only materialise if a case progressed all the way to tribunal, the employer loses and the tribunal accepted the arguments that the employer had behaved unreasonably."

According to figures published by the Ministry of Justice (MoJ) last month, the number of new cases lodged with employment tribunals in the final three months of 2013 fell by 75% in comparison to the previous quarter and by 79% compared to the same period in 2012. The statistics cover the first quarterly period to have passed since changes to UK laws were introduced that require individuals to pay a fee to lodge employment claims at a tribunal against their employer.

Blyth said that whilst the UK government has been able to openly state that the aim of the Acas early conciliation scheme is to resolve cases without the need to have recourse to a tribunal, it has been less willing to admit that the same motive was behind the reason to require employees to pay a fee to lodge claims before a tribunal, as introduced under UK law last summer.

Fees to bring a claim to an employment tribunal or the Employment Appeal Tribunal (EAT) were introduced on 29 July 2013. Under the new structure, parties have to pay an upfront fee to raise a claim followed by a further ‘hearing fee’ once the case is referred to a tribunal. Claim types are subdivided into the administratively simple ‘Type A’ claim, with fees of £160 and £230; and ‘Type B’ unfair dismissal or discrimination claims, with fees of £250 and £950. Flat fees apply to EAT cases. A remission system operates to exempt people on low incomes from having to pay the full fees.

"The fees regime is currently the subject of a legal challenge from the trade union UNISON, with an appeal to the Court of Appeal pending," Blyth said. "UNISON has, in part, argued that requiring claimants to pay a fee to bring a claim against their employer to tribunal reduces access to justice. UNISON is arguing that the fees particularly disadvantage lower paid workers and thereby indirectly discriminate against women and ethnic minorities. The government defends such allegations by saying that the fees regime is necessary to ensure the cost of the tribunal system is shared between the taxpayer and tribunal users."

Other changes to UK employment laws that came into force on 6 April include the raising of the maximum compensatory award that employees can win for a successful unfair dismissal claim from £74,200 to £76,574. New increased statutory rates for sick pay, maternity, paternity or adoption pay have also been set, whilst businesses have been granted greater freedom in how they record information about employee sickness absence.