The early bird catches the worm under new tribunal changes
While hardly cutting the swathes of red tape the government promised, recent changes to the employment tribunal system bring good news for businesses, the most important being more opportunities to nip weak claims in the bud.
Now, of course, most of these changes are taking place behind the scenes, involving administrative adjustments, but there are still important changes to make a note of.
For starters, the introduction of fees means claimants will now have to pay a £250 or £160 ‘issue fee’ depending on the type of the claim, followed by a £950 or £230 ‘hearing fee’ should the claim proceed to tribunal. Designed to reduce the number of misconceived claims this has been trumpeted as the big win for business, however with many claimants eligible for reductions in costs, or funded by trade unions or insurance companies, the reality is that the real victims may be the ever-pinched middle, for whom the potential compensation might not outweigh the investment risk.
More obvious changes however are the new ‘sift’ stage and merging of case management discussions (CMDs) with pre-hearing reviews (PHRs). Taking the sifting stage first, this is where an employment judge will review the claimant’s initial claim form and respondent’s response to that claim to decide whether a case is arguable. The judge will have the power to strike weak cases out on the basis of the paperwork alone. The benefit to industry is clear: if the employer’s defence is strong and clearly pleaded then the ‘sift’ provides businesses with an immediate opportunity to deal a knockout blow to unmeritorious claims, and avoid unnecessary expense.
By combing CMDs with PHRs, the government has also put an end to the frustrating delays which meant businesses would have to wait weeks – even months – between their purely administrative case management discussion (which timetables hearings and agrees issues to discuss) and the later pre-hearing review which carries the power to strike a claim. The delays and costs occasioned by such separate hearings would often put employers off seeking PHR’s, so this new amalgamation of the two processes strikes me as a great move to alleviate stress and reduce costs for businesses, both directly in terms of potential legal fees, as well as the indirect cost to businesses from time lost by diverting the attention of senior managers.
Other recent changes in the law and tribunal practice include the increase in minimum service from one to two years for an employee to claim unfair dismissal, excepting in cases of whistleblowing, harassment, discrimination and other specified exclusions; the intention being to improve flexibility and give SMEs confidence to hire new staff. Another is the ruling to make pre-termination settlement negotiations and agreements inadmissible in some forms of tribunal claim. It is hoped that this will encourage resolution by allowing those involved to consider or make an offer without the fear of it being used against them or later seen as an admission of a lack of confidence in their case.
Combined together these changes, although not by any means dramatic are positive steps for business, providing early-stage opportunities to oppose a weak or unmeritorious claims. But that doesn’t mean companies can afford to be complacent. In fact the more time you invest in due diligence, keeping a clear paper trail and following appropriate dismissal procedure, the more you stand to benefit from these changes and improve your chances of avoiding a long, drawn-out tribunal. My advice to clients is to pay careful attention to their initial response and line their ducks up in a row in readiness for the sifting and pre-hearing review ‘check-points’. Considering advice from a direct access barrister who can also assist with drafting your responses is another option that can help your case. A small investment when compared with the tens of thousands of pounds often spent on retained solicitor fees over the course of a tribunal.
Michael Salter is a barrister specialising in employment law and as associate of myBarrister.co.uk the leading direct public access barrister portal.