New legislation that came into effect Monday, July 29 is expected to lead to a fall in the number of employment tribunals against Scottish businesses, according to Kim Pattullo, head of the employment team in Scotland at law firm HBJ Gateley.
From Monday, employees wishing to take claims to the employment tribunal will have to pay up to £250 to lodge their claim, and a further £950 to have their claim proceed to a hearing. Previously, employees could take a claim to hearing without having to pay.
The changes, are intended to combat Government fears that tribunal claims with little chance of success were acting as a ‘one-way bet’ against employers, with little risk to the pursuing employee.
Kim Pattullo said that tribunal proceedings were not always the best way of resolving disputes, and predicted a drop in claims which lack merit.
She said: “A huge amount of time and effort is currently wasted each year as HR departments across the country deal with what turn out to be groundless tribunal claims.
“The changes should help ensure that legitimate claims are dealt with effectively and in a timely manner. The tribunal service has been under a huge amount of pressure in recent years and spurious claims cost the Government, and Scottish businesses, a huge amount of money every year.”
In addition to the introduction of fees, new laws will cap the amount of compensation that an employee can claim for unfair dismissal, at a maximum of £74,200 or 52 weeks pay, whichever is lower.
This follows the general practice of employment tribunal decisions on compensation, where more than a year’s salary is very rarely awarded and the average award in 2011/12 in unfair dismissal cases was £9,133. It should also help to manage the expectations of those employees looking for large settlements.
Other changes being brought in from today include:
- The introduction of confidential pre-dismissal negotiations between employees and their employers, which will not be admissible in unfair dismissal cases if talks fail. It is hoped that the ability to have these ‘protected conversations’ will help both sides reach consensus on employment termination, without employers fearing that the talks can be used against them if negotiations break down.
- Compromise agreements will become known as ‘settlement agreements’ in a bid to simplify the process and make them more readily used by smaller employers wishing to manage a difficult employment situation.
There will also be an increased role for the Advisory, Conciliation and Arbitration Service (ACAS). From spring 2014 most potential claimants will have to contact ACAS prior to issuing a claim, to allow an ACAS conciliation officer to attempt a negotiated settlement between the employer and employee. If a settlement is still not possible the employee will be issued with an ACAS certificate and, only once this has been issued, will the case be granted permission to proceed to tribunal.
ACAS has already begun increasing the amount of contact it has with businesses, taking part in 251 workplace mediations– a 13% increase on the previous year – as well as spending 1600 days delivering 950 courses in 2011-12.
Kim said: “Most employers will welcome the greater involvement of ACAS as well as the greater level of protection the new changes will bring. There is some concern that these reforms will infringe on the rights of employees, with some claiming it will make it more difficult for legitimate claims to receive justice. However, this shouldn’t be the case.
“By reducing the strain on the tribunals service, legitimate claims should receive a greater focus. Frivolous claims not only cost the Government, they cost businesses and make it more difficult for legitimate claimants to get proper compensation.”