• 17 April 2014

Major changes to Employment Tribunals

As is common, April brings changes in Employment law which every employer needs to be aware of. In particular, there are key changes to the Employment Tribunal procedure, which have the potential to fundamentally alter the way employers deal with claims.

Perhaps most importantly, in claims issued on or after 6 April, Tribunals will have the power to order financial penalties against employers where they consider there are “one or more aggravating features” in their breach of the worker’s rights. This is effectively a fine, on top of compensation paid to an employee, and can even be imposed if no financial compensation is ordered. It has the potential to change attitudes to settlement of proceedings, as employers may want to reach settlement to avoid the risk of financial penalty at Tribunal.

What is considered an “aggravating feature” is yet to be clarified, but the Tribunal can take into account the employer’s size, the duration of any breach of rights and the behaviour of both employee and employer. An Employment Tribunal is expected to be more likely to find aggravating features for deliberate actions or those committed with malice, where the employer is an organisation with a dedicated HR team or where the employer repeatedly breached the right concerned.

6 April also saw the introduction of ACAS Early Conciliation, which will be compulsory by 6 May. Claimants seeking Early Conciliation simply need to provide their contact details and that of their employer, and ACAS will contact both parties to see if they can reach a settlement. It remains to be seen whether Early Conciliation will be successful in reducing the number of claims. In particular, if employers receive little or no information about the nature of a complaint, it is difficult to see how it could be resolved.

Discrimination questionnaires have been repealed for any acts of discrimination occurring on or after 6 April. Whilst this may seem at first glance to remove administrative burdens on employers, it should be remembered that employees with discrimination claims will still be able to request information from employers, whether informally or by way of a request for further and better particulars in a Tribunal claim. Failure to respond could still be taken into account by a Tribunal when determining a claim. The practical effect of the repeal may therefore be limited.

The usual increases in statutory payments such as SSP, SMP, SPP and SAP took place on 6 April. SSP is now £87.55 per week and SMP, SPP and SAP £138.18. The SSP percentage threshold scheme has also been abolished, meaning that employers will no longer be able to recover amounts of SSP.

The statutory compensation limits for unfair dismissal and redundancy payments also increased on 6 April, rather than in February as previously. The statutory limit on a week’s pay is now £464 and the maximum compensatory award for an unfair dismissal claim £76,574 (or a year’s salary if this is lower).