UK: Tribunal reform - consultation on government proposals

The Government is consulting on proposals to reduce the number of workplace disputes reaching the employment tribunal and improve the employment tribunal process.  The consultation document "Resolving Workplace Disputes" is available here; views are sought by 20 April 2011.  Herbert Smith will be surveying clients shortly to include their views in a consolidated response.

BIS intend to consult separately in the Spring on the introduction of a fee-charging mechanism for employment tribunals (and has not yet suggested what fee it has in mind for bringing a tribunal claim).

Proposals subject to consultation now include:

• Eligibility to claim unfair dismissal
  • the qualification period to claim unfair dismissal to be doubled to two years.
• Financial penalties for employers
  • tribunals to impose financial penalties on employers found to have breached an individual's employment law rights, payable to the Exchequer (unless there are exceptional circumstances such as the size of the employer or where there is a large multiple claim). The proposed penalty is half the total award, subject to a floor of £100 and cap of £5,000, and subject to a 50% reduction for payment within 21 days. This would only apply to new legislation after a six month window.
  • BIS are seeking views on whether the formula for the annual uplift to tribunal awards should be amended, possibly to stop rounding-up and to use CPI rather than RPI increases.
• Early conciliation
  • claimants to have to submit key details of their claim to Acas within the usual time limit for the claim, with Acas to be given a month to attempt to conciliate the dispute (during which the clock will be stopped for time limit purposes). It would not be obligatory to engage in conciliation; if a party refused, Acas would provide information about the likely value of awards and the average duration of a tribunal claim to encourage a better-informed decision as to how to proceed.
• Improved strike-out, deposit and costs powers
  • tribunals to be able to strike out claims or responses without receiving representations from the parties, subject to a party being able to apply to set aside the strike out order. Respondents would be able to ask a tribunal to strike out a claim, or make an unless order requiring a claimant to provide more information, without first having to submit a full ET3.
  • tribunals to be able to order the payment of a deposit to proceed with a claim at any time, the maximum level of deposit to double to £1,000, and the EAT to be able to make a deposit order.
  • the maximum costs that a tribunal can award (without court assessment) to be doubled to £20,000.
• Encouraging settlement
  • claimants to be required to include a statement of loss in the ET1.
  • where a party has refused a reasonable formal settlement offer lodged with the tribunal office, tribunals to be required or enabled to alter the amount of any financial award made or, if the claim is lost, consider making a costs order.
• Shorter tribunal process
  • witness statements normally to be taken as read, rather than read out.
  • witness expenses no longer to be state-funded; the party calling a witness would have to pay their expenses (to discourage unnecessary witnesses).
  • tribunal judges to be able to sit without wing members to decide unfair dismissal claims. BIS is seeking views on other claims that might be suitable for a judge to hear alone, and on whether the EAT could be a single judge.
  • more interlocutory work (for example, dealing with hearing dates, amendments to pleadings, exchange of documents etc) to be done by legal officers rather than judges.
  • the tribunals' duty to deal with a case proportionately to include consideration of the need to share tribunal resources throughout the whole tribunal system.

BIS have also published a (rather over-simplified) Employers' Charter, setting out steps that employers can take (such as making redundancies if their business suffers a downturn).