Changes for Employment Tribunal claims under the ERRA 2013

EAT judges to sit alone – judges in the Employment Appeal Tribunal (EAT) will now normally hear cases alone, although they will be able to direct that proceedings are heard together with two or four lay members if they consider this appropriate.

No qualifying period for unfair dismissals for political opinions or affiliations – there will now no longer be any qualifying period for unfair dismissal claims where the reason for the dismissal is the employee’s political beliefs or affiliations.  This is not a new ground for bringing a discrimination claim but Tribunals may feel obliged to find a dismissal on such grounds unfair.  This is because the dismissal may be considered a breach of the Claimant’s European Convention Rights, namely the universal right of freedom of assembly.  This has been found to apply to all associations, including those whose views offend, shock or disturb.

New maximum compensatory award for unfair dismissals – the Secretary of State has been given wider powers under the ERRA 2103 to vary the statutory cap on the compensatory award. A draft order has been put before Parliament that will set the limit as the lower of the current cap (£74,200) or one year’s gross pay. It is expected that this will come into effect sometime in July (we consider it is likely to be 29 July) and will apply to all dismissals occurring after that date.

New public interest test for whistleblowing claims – a disclosure will only now be a qualifying disclosure for a whistleblowing claim if is “in the public interest”. The “good faith” requirement has been removed, although the tribunal will now have the power to reduce any award by 25% if the disclosure is not made in good faith. The intention behind the change is to stop things such as internal complaints about breaches of an individual’s employment contract being regarded as protected disclosures with a view to significantly narrowing the scope of the whistleblowing legislation.  However, in our view some complaints by an individual about the way they have been treated will arguably be in the public interest.  For example, an employee of an organisation providing a service funded by a public authority who complains of a culture of discrimination may argue it is in the public interest that discrimination in the delivery of that service is disclosed.

Changes to deposit and costs orders – new rules allowing tribunals to make a deposit order in respect of a specific part, rather than the whole of, a claim or response will be introduced.  Litigants in person will be able to claim both preparation time and witness expenses (currently they can only be awarded one or the other). These new rules will be brought in under the new procedural rules, effective from 29 July 2013.

Renaming of compromise agreements – compromise agreements will be renamed “settlement agreements”.

Pre-termination negotiations to remain confidential – evidence of “pre-termination negotiations, i.e. any offer or discussion of proposed settlement terms, will be inadmissible in ordinary unfair dismissal proceedings unless there has been “improper behaviour”. This change will be accompanied by a new statutory Acas Code of Practice on settlement agreements, which has been published in final draft form here. It includes an explanation of the new law, basic guidance on how to offer a voluntary settlement and guidance on what would amount to “improper behaviour”.  We consider these provisions to be relatively limited in their protection for employers.  For example, automatic unfair dismissal claims, breach of contract or discrimination claims will not be covered.  Many employers successfully have “without prejudice” discussions with staff to avoid going through time consuming internal procedures.  These conversations can be very effective if handled well.  We don’t consider these changes should lead to such conversations being handled with any less preparation or care as there are a wide range of arguments employees may use to get around the new provisions.

Removal of employers’ liability for third-party harassment – the existing provisions under the Equality Act 2010 which make an employer liable for harassment of an employee by a third party, if the employer fails to take reasonable steps to prevent it, will be removed. Employees will still be able to bring a claim under the general harassment provisions and we consider employers could still face liability under the general provisions if they fail to take action in the face of third-party harassment.

No strict liability for breaches of statutory health and safety duties – a new power will allow the government to introduce regulations meaning employers will no longer be liable for breaches of health and safety legislation unless negligence can be shown. The government intends to introduce these regulations by 1 October 2013. The Health and Safety Executive (HSE) is currently consulting on a proposal that would exclude pregnant women and new mothers from this change (i.e. strict liability would still apply in these cases).

Mandatory pre-claim conciliation – before a claim can be submitted, claimants will be required to contact Acas who will attempt to promote an early settlement. The time limit for bringing a claim will be put on hold while negotiations take place.

Abolition of discrimination questionnaires – the right of claimants to serve a discrimination questionnaire on respondents will be removed. However, in an apparent concession to opponents of this move, the government has announced its intention to promote a new “informal approach” allowing individuals to ask questions of employers, which will be set out in Acas guidance.

Financial penalties for employers who lose at tribunal – tribunals will also be given the power to impose a financial penalty of up to £5,000 on employers who lose at tribunal where the case has “aggravating features”. These have not been defined in the legislation. However, the government has indicated that penalties would be imposed where the breach involves unreasonable behaviour, such as negligence or malice, and that genuine mistakes by the employer will not be penalised in this way. This penalty will be payable to the Secretary of State.

For more information or advice on the issues covered here, or advice in relation to handling Employment Tribunal claims generally, please contact Matt Wort on 0121 214 3501 or [email protected].

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