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Employment Tribunal Changes

New rules aimed at reducing the number of employment tribunals have come into force. Under these rules, which came into affect on 6th April 2014, staff or employers will be required to seek advice from ACAS before having access to a full tribunal.

Staff wanting to bring a case of unfair dismissal or discrimination now have to first notify the conciliation service ACAS to see if the dispute can be resolved.
ACAS, which stands for Advisory, Conciliation and Arbitration Service, was set up to improve employment relations and prevent tribunals.

Employment relations minister Jenny Willott said the Early Conciliation scheme was “good news for employees and employers”. She said: “It will help them resolve their workplace disputes, avoiding the stress, time delays and excessive costs all too often associated with tribunals.”

Employers face fines if they lose a case at tribunal.
From the 6th April 2014 if an employer loses a case at tribunal brought by an employee or former employee, it could be fined up to £5,000 to be paid to the Secretary of State (new section 12A, Employment Tribunals Act 1996) on top of any back pay that is due to the employee.

Tribunals will have the option to implement a fine where they conclude the employer has breached the worker’s rights involved in the claim, and that the breach has “one or more aggravating features”

What are Aggravating features?
The new legislation does not define what “aggravating features” are in this context. It is for the employment tribunal to decide, taking into account any factors which it considers relevant, including the circumstances of the case and the employer’s particular situation.

The government’s explanatory notes suggest that some of factors which an employment tribunal may consider in deciding whether to impose a financial penalty could include:
the size of the business
the duration of the breach of the employment right
the behaviour of the employer and the employee.
The notes also suggest that a tribunal may be more likely to find the employer’s behaviour in breaching the law had aggravating features where:
the action was deliberate or committed with malice
the employer was an organisation with a dedicated HR team
the employer had repeatedly breached the employment right concerned.
The employment tribunal may be less likely to find that the employer’s behaviour in breaching the law had aggravating features where:
the organisation has only been in operation for a short period of time
is a micro business
has only a limited HR function
the breach was a genuine mistake.
Caps
Tribunals must take into account the employer’s ability to pay when deciding whether or not to impose a financial penalty.

If the tribunal makes a purely non-financial award (for example, an order for the employee to be reinstated) then the financial penalty must be at least £100, but cannot exceed £5,000.

If compensation is awarded to the employee, then the financial penalty must be 50 per cent of the claimant’s financial award (again subject to a minimum of £100 and a cap of £5,000).

If the employer pays no later than 21 days after the date the written notice of the decision is sent to it, the fine is reduced by 50 per cent.

The Costs
From the 6th April, any employer that loses in a tribunal will potentially face an additional cost on top of the three it already might incur.
 
These are:
The actual costs – legal or otherwise, of fighting the claim;
Award of compensation – made by the tribunal;
Reimburse the successful claimant – for the fees paid to pursue the claim
And NOW
Financial penalty – for breaching the claimant’s employment rights.

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