Employment law reforms - an overview - Business Works
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Employment law reforms - an overview

Pam Sidhu, The Wilkes Partnership Sweeping changes to UK employment have come into force. Pam Sidhu, employment law expert at law firm The Wilkes Partnership, explains why she believes the reforms will largely be welcomed by employers.

These reforms are arguably the most substantial changes to employment law by the coalition government to date. The most significant change is the introduction of employment tribunal fees. For the first time since the tribunals were set up in the 1970s, employees will now have to pay a fee to bring a claim, whereas up until now they have been able to do this for free. The typical fee to bring an unfair dismissal claim, the most common claim brought in the Employment Tribunal, is £1200. This is likely to be a major deterrent for employees, and we anticipate that there will be a noticeable reduction in the number of employment tribunal claims brought by workers.

Also, tribunals will now have greater powers to award unlimited costs against unreasonable conduct. This means that, if the employer wins at trial or earlier, it can seek to get any costs it has incurred paid by the employee who has brought the claim. Previously this was capped at £20,000; now, the Tribunals can award unlimited costs. This change will be welcomed by businesses, many of whom are sick of having to fund significant legal costs to defend weak and undeserving claims brought by employees which often donít have a legal leg to stand on.

the likely reduction in claims is good news for British businesses

While the likely reduction in claims is good news for British businesses, we also expect that employees will want any fees they have paid to launch a claim factored into any out of court settlement reached with the employer. Itís also worth noting that employees on low incomes can potentially be excused from having to pay all or part of the fee, but they will need to provide supporting evidence. The obvious example is a worker or former employee on income-based Job Seeker's Allowance, who can be excused in full from the fee.

Also being introduced is a useful tool that gives employers the ability to keep confidential any pre-termination negotiations to settle employee claims. This essentially means that any settlement package initially offered to encourage a dismissed employee to go quietly cannot be disclosed in tribunal if the employee rejects the offer and instead brings a claim. However, businesses should be aware that this rule is not hard and fast, as there is a potential exception in the case of Ďimproper behaviourí. Businesses will all want further details on exactly what this means.

Also, what employers would refer to as compromise agreements will now be relabelled as settlement agreements. Although this doesnít change the actual process, it is important that businesses take legal advice if they are looking to use this kind of agreement to waive employment rights, eg. to dismiss an employee.

Finally, next year, an early conciliation service will be rolled out for employees and employers to try and settle workplace disputes without the use of an employment tribunal. The service, which is expected to be launched in April 2014, means anyone who wants to lodge an employment tribunal claim will have to notify ACAS (Advisory, Conciliation and Arbitration Service) first and then have one month to resolve the dispute. This move towards a more collaborative approach is another hurdle employees will have to overcome in order to take an employer to tribunal and is good news for employers who are keen not to incur legal costs or go to tribunal.


For more information, please visit: www.wilkes.co.uk



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