Andy Willis comments on the proposed Employment Tribunal reform

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31 Mar 2011

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  The Government's consultation document 'Resolving workplace disputes' was published at the end of January. The consultation, which closes on 20 April, seeks information on the extent to which workplace disputes are currently resolved by mediation. It also proposes a number of changes to the way in which the employment tribunal system operates, with a view to ensuring that the process is as swift, user-friendly and effective as possible. The Government is keen to encourage early workplace-based mediation to resolve disputes, arguing that such an approach helps to avoid the tribunal route and thereby achieve financial savings. It is also suggested that mediation promotes the preservation of the employment relationship, employee engagement, the maintenance of productivity and reduced sickness absence. However, there is little information available on the extent to which mediation is currently successfully used in the workplace and views on this are sought. The consultation document outlines a number of proposed changes to the tribunal system. Avoiding undue costs and stress will be a key aim. A number of the resulting proposals are "business friendly", but one in particular may represent a sting in the tail for employers. One of the most frustrating aspects of the tribunal system for employers is the ease with which claimants can lodge tribunal claims which must be met with an immediate (and often costly) response. A number of proposals seek to address this issue. The most widely publicised of these is the proposal to increase the qualifying period for claiming unfair dismissal from one year to two. The Government believes that such a change will enable businesses to feel more confident about recruiting and allow more time for the employment relationship to become established. It is estimated that making this change will result in between 3,700 and 4,700 fewer unfair dismissal claims per year (between 6.4% and 8.2% of last year's total number). Such a result would be welcome although even if such a change is introduced employers will still need to ensure that fair and robust procedures are followed from the beginning of the employment relationship – as is currently the case. This is because such procedures help employers to avoid or resist claims of unlawful discrimination, which can be made at any point in the employment relationship, regardless of length of service. The Government is considering charging claimants a fee to lodge tribunal claims. This will be the subject of further consultation in the near future. It is also considering introducing a requirement that all claims be submitted to the Advisory, Conciliation and Arbitration Service (Acas) before the employment tribunal, to allow Acas a period of up to one month to (1) provide potential claimants with a clear understanding of issues, such as how long a case might take and what a tribunal might award, and (2) offer the potential parties pre-claim conciliation. The Government estimates that this will result in approximately 12,000 fewer claims per year. Employers will welcome any change which causes claimants to pause and reflect before proceeding with tribunal claims. An early opportunity to achieve cost-effective settlement will also be broadly welcomed. Although recent experience suggests that it can sometimes be difficult to persuade claimants and parties generally to settle cases early. The 2004 reforms introduced fixed conciliation periods in order to encourage just this, but the Gibbons Review in 2007 reported that parties often failed to consider settling until later in the process, at which point Acas assistance was no longer available. Fixed conciliation periods were abandoned in 2008. A number of further proposals are included in the consultation document which relate to the way the tribunal process operates once a claim is in the system. These would seek to give tribunals greater power to tackle weak cases (e.g. the introduction of a more flexible strike-out power and a power to issue a deposit order at any stage of the proceedings) and promote shorter hearings (e.g. statements to be taken as read and judges to sit alone in more jurisdictions). These proposals are welcome. However, one proposal that will be of concern to employers is the suggested introduction of automatic financial penalties to be imposed on employers found to have breached employment rights. These penalty sums would be payable to the Exchequer and would be in addition to the compensation awarded to claimants. This proposal will undoubtedly be vigorously resisted by business groups, particularly given the significant sums that are already awarded to claimants in relation to many tribunal claims. About Andy Willis Andy Willis is head of litigation at Croner, the UK's largest provider of workplace information, software and services, part of Wolters Kluwer, the global information services company. Andy qualified as a solicitor in 2000 and has worked in employment law since then, initially in private practice in Birmingham. Since joining Croner in 2003 he has specialised in employment tribunal litigation. This article first appeared on HRZone.

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