subject: A Summary Of The Government's Consultation On Employment Tribunal Reform - Part 1 [print this page] A Summary Of The Government's Consultation On Employment Tribunal Reform - Part 1
On 27 January 2011 the Department for Business, Innovation and Skills (BIS) launched a consultation on wide-ranging reforms to the employment tribunal system. Resolving Workplace Disputes: A Consultation sets out a number of proposals, many of which are aimed at encouraging early resolution of disputes without a hearing, speeding up the tribunal system, reducing the cost to taxpayers, and boosting economic growth.The proposals include raising the qualifying period for unfair dismissal to two years, introducing compulsory pre-claim Acas conciliation, charging claimants a fee, and wider powers to strike out a claim or order payment of a deposit. The limit on costs awards could be raised from 10,000 to 20,000, and employers who lose at tribunal may face not only damages, but a fine of up to 5,000 payable to the Exchequer. The consultation closes on 20 April 2011, thus far the following areas of employment law have been considered:Qualifying period to rise from one year to two yearsThe government proposes extending the unfair dismissal qualification period from one to two years. The government believes this will encourage economic growth by giving businesses more confidence when they are looking to engage in recruitment of new staff, although the projected effect of this measure on the number of tribunal claims is "modest", at only 3,700-4,700 per year.One reason for the proposal is that there "may be a risk" that one year is "too short" for employers and employees to resolve differences they may have, and that this "acts as an incentive to some employers to bring the relationship to an end earlier than is in everyone's interests".The government does not see this proposal as "a charter for businesses to sack people unfairly", although critics suggest that it will extend the scope for businesses to do just that.Claimants to submit all disputes to Acas before bringing tribunal claimOne of the aims of the reforms is to encourage early dispute resolution before a case reaches tribunal. Acas has recently introduced voluntary pre-claim conciliation (PCC) which is proving successful in many cases. However, only 20% of claimants currently speak to Acas before they submit their claim.It is proposed that claimants should have to submit details of their dispute (on a shorter version of the ET1) to Acas, within the normal time limit. This will stop time running for the purposes of a tribunal claim. There will then be a mandatory one month period during which both parties must engage in PCC. Even where this is unsuccessful, Acas will be able to give useful advice and information to the parties that will enable them to "make a more informed decision about going forward" with the claim. The government believes this could reduce the number of claims lodged by 12,000 per year.The consequence of this proposal is that Acas would no longer have a duty to conciliate once a claim progresses to tribunal, although it will have a power to do so.Guidance to manage parties' expectationsThe government notes there is evidence to suggest that both claimants and employers tend to be over-confident about their changes of success and the potential value of their claim. It proposes that the early conciliation reference will enable Acas to provide both sides with impartial information and advice on the value of the claim and the prospects for success before a claim is lodged. Information can also be made available in the ET1 guidance notes concerning the likely value of awards, and the average time taken to deal with claims.Introduction of feesThere will be a separate consultation on fees in the Spring, however the consultation paper comments that fees could "incentivise earlier settlements and disincentivise unreasonable behaviour like pursuing weak or vexatious claims".The consultation paper does not set out any concrete proposal for fee-charging, and does not comment as to the amount of any fee that may be charged (although various media sources have speculated that it may in some cases be up to 500).Power to strike out or order a deposit at any stage, possibly without a hearing (but subject to right of review)The government has recognised that tribunals existing powers to deal with weak claims are somewhat limited. For example, strike out and deposit orders can be made at a pre-hearing review but not at a case management hearing, and the claimant must have the opportunity to make representations.The government proposes to make these powers available at any time, possibly without a hearing or the right to make respresentations, although claimants would have the right to request a review afterwards. Respondents could also request a strike out without having to submit a full ET3.Further particulars of claim before ET3It is also proposed that employers should be able to request further information about the claim before having to submit a full ET3. The tribunal could then make an "unless order" requiring the claimant to provide further information or face a strike-out.To see the rest of the points raised so far during the course of the consultation look out for 'A Summary of the Government's Consultation on Employment Tribunal Reform - Part 2'.
