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A Review of Employment Law Hearing Structures

Whilst in theory the recommendations of the Law Commission do not extend beyond England and Wales, in practice a significant number of proposals deal with substantive employment rights and as such, would also bring changes in Scotland.

Below is a summary of the most important recommendations, which (if implemented) would take effect in Scotland:

1. Extending a time limit for all employment tribunal claims:

The Law Commission recommended that the time limit for bringing a claim should be 6 months for all employment tribunal claims.

The primary time limits for bringing an employment tribunal claim are short. In most cases, a claim must be presented to the tribunal within 3 months of the act complained of (such as the date of dismissal or the date of a discriminatory act). This feature of tribunal claims derives from the original concept of tribunals being a forum for speedy and informal resolution of employment disputes. However, nowadays employment tribunal cases are far more complex and so the extension of time limits would be a welcome change.

2. Expansion of the contractual jurisdiction of the employment tribunal to include limb ‘B’ workers:
The Law Commission recommended that employment tribunals have jurisdiction to determine breach of contract claims in relation to workers (as they have in relation to employees).Employment tribunals can hear certain breach of contract claims brought by employees against employers. As it currently stands therefore, this contractual jurisdiction does not extend to workers. The Law Commission’s proposal would provide workers with greater protection and avoid situations where workers have to bring a claim in both the employment tribunals (in respect of a statutory claim) and the civil courts (in respect of a contractual claim). The Report indicated that this change is particularly welcome in light of the recent changes in the labour marker, and an increased number of individuals with a worker status. Please note that this expansion is for breach of contract only – not unfair dismissal which still requires employment status.

3. Raising the contractual damages limit from £25K to £100K:

The Law Commission recommended that the current £25,000 limit on employment tribunals’ contractual jurisdiction in respect of claims by employees be increased to £100,000. As it currently stands, employment tribunals in England & Wales (and Scotland) cannot award more than £25,000 in terms of damages for breach of contract. The Report indicated that this generates confusion in practice, pushing some cases into the civil courts and therefore splitting disputes between the court and the employment tribunal, where in fact they can be heard in one forum. This can happen where an employee has claims of both unfair dismissal (which must be litigated in the tribunal) and wrongful dismissal (a contractual claim which may be litigated in the tribunal, but subject to the £25,000 cap). The increase in the damages limit recommended by the Law Commission would be the first increase since 1994 when the breach of contract jurisdiction was shifted to employment tribunals. If introduced, it will allow more claimants to bring contractual claims arising from their employment in the specialised employment tribunals. This change will particularly affect executive employees with large salaries and long notice periods who may be unable to make claim in the tribunal due to the current cap.

4. Applying a uniform test for extending the limitation period

The Law Commission recommended that a “just and equitable” test should be used in all cases, when assessing if a claim presented to an employment tribunal outwith the usual time limits can be considered.
At present, if a claim is submitted late, an employment tribunal must consider if it was “not reasonable practicable” to bring the claim on time (save for discrimination claims). The Report indicates that the current test prevents some deserving cases from proceeding even where there is good reason to extend the limitation period. If the “just and equitable” test is used instead, employment tribunals will be better equipped to take into account the wider circumstances of the claim. The Report concludes that the revised test is more flexible and will empower tribunals to deliver justice in individual cases, however if time limits are extended to 6 months, Judges are only likely to extend deadlines with particularly persuasive arguments.