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Employment Law Update

Full steam ahead for employment reforms: are you on board?

Monday 29 July 2013 was a big day for employment law. Whilst the introduction of the Employment Tribunal fees has been hitting the headlines, there are several other changes to employment law that businesses and individuals should be aware of as well. Robert Holland investigates the new changes.


Tribunal fees

The much talked about Employment Tribunal fees have finally been introduced. From Monday 29 July 2013, anyone wanting to submit a claim to the Employment Tribunal will need to pay an initial “issue” fee. The level of the fee will depend on the type of claim. For more straightforward claims, including “money claims” (for example a claim in respect of unlawful deduction of wages), the issue fee is £160. However, to bring a claim for unfair dismissal (including constructive dismissal) and discrimination, the issue fee is £250.

In addition, if the case goes to a full hearing, there will also be a “hearing” fee. Again, the fee will differ depending on the claim. For the more straightforward claims, the hearing fee is £230. For the more complex cases, including claims of unfair dismissal and discrimination, the hearing fee is £950. Therefore, to bring a claim all the way to a hearing, the Claimant will have to fork out either £390 or £1,200.

If the Claimant cannot afford the fees then he or she may apply for remission but since it will be determined on a combination of both the Claimant’s savings and income, fewer people than expected will be entitled. Claimant’s need to be cautious because if they do not pay the fee then their application may be rejected, which given the strict time limits for bringing a claim, may be fatal to their case.

There will also be fees for reviewing applications or default judgments as well as appeals. There are also rules that deal with the bringing of multiple party claims as well. Also, if the case goes to judicial mediation, then the Respondent will be required to pay the judicial mediation fee of £600.

The new rules only affect claims that were brought on or after 29 July 2013 (or after 4pm on Friday 26 July 2013 if the application was submitted to the Employment Tribunal online (but not by email)).

For more information on the new Employment Tribunal fees click here.

To read more about the recent Tribunal fee litigation in England and Scotland click here or view our July edition of employment law MATTERS.

Changes to Employment Tribunal rules

The new fees have certainly eclipsed the other changes to the Employment Tribunals also coming into force on 29 June 2013. However, there are some important changes there to take note of.

Amongst these changes, Employment Judges will now have the opportunity to strike out claims or defences if the Judge thinks that they do not have reasonable prospects of success. Both the Claimant and Respondent have the ability to appeal in writing if their claim or defences are dismissed.

Further, the current number of hearings has been reduced under the new rules. The “Preliminary Hearing Review” and the “Case Management Discussion” have been merged into one hearing, known as the “Preliminary Hearing”. Accordingly, there should only be two hearings: the Preliminary Hearing and the full Hearing.

For more information on changes to the Employment Tribunal rules click here.

Lowering the cap on unfair dismissal compensation

The maximum amount that employees can receive from the Employment Tribunal for an unfair dismissal has been capped by new changes.

Former employees can claim, amongst other awards, a compensatory award based on loss of earnings and benefits (as well as future earnings and benefits). The applicable amount sued for has always been seen as an art as opposed to a science, with a cap of £74,200.

From 29 July 2013, the Claimant will only be entitled to the lesser of £74,200 or 52 weeks’ wages. It is important to note that wages do not take into account benefits such as pension contributions, meaning that the changes will have effectively lowered the maximum amount that many Claimants can claim through the compensatory award.

For more information on the new cap click here.

Pre-termination negotiations

Pre-termination negotiations entered into before the termination of an employment contract have become inadmissible in unfair dismissal cases.

The old position was that for such a negotiation to be inadmissible in legal proceedings there needed to be an existing dispute between the parties. However, the new provision means that existing disputes are not required to render the negotiations inadmissible.

The provisions do not apply to automatic unfair dismissals (e.g. dismissals due to pregnancy or whistle blowing).

A statutory code will be published to give businesses guidance on how to correctly use pre-termination negotiations.

For more information on the changes to pre-termination negotiations click here.

“Compromise Agreements” renamed “Settlement Agreements”

Finally, the contract used between employers and employees when terminating the employment contract has undergone a rebrand. The well known “Compromise Agreement” has been renamed “Settlement Agreement”.

The reasoning was to facilitate settlement as it was thought parties were less likely to enter into an agreement where they felt as though they were compromising.

Whilst the substance of the contract remains the same, employers should take account of the change and update the name on the documents accordingly.


If you’re affected by any of the recent employment law changes or would like to speak to someone about an employment related issue, then contact our Employment Team.

To follow B+M’s Employment Team on twitter – @EmploymentLawBM