Changes to employment law coming into force in July will make it harder for employees to take legal action, say Coles Miller Solicitors.
The new rules could also make it easier for employers to pay less compensation when they dismiss employees unfairly.
The new legislation has been designed to reduce the number of claims going before tribunal hearings, said the Dorset employment solicitors.
Changes include new fees - purportedly to dissuade the issuing of weak, opportunist and vexatious claims - and also a reduction (for some claimants) in real terms on the cap on damages.
Compulsory conciliation is proposed to be reintroduced in 2014 to help workers and employers resolve grievances without the need for legal action.
At present there are no fees for Employment Tribunal hearings. Two new sets of fees will be coming into force on July 29th:
- Type A Fees (for basic claims, such as unpaid wages) - a £160 issue fee followed by a £230 hearing fee
- Type B Fees (for more complex claims, such as unfair dismissal or discrimination) - a £250 issue fee followed by a £950 hearing fee.
Head of Coles Miller’s Commercial Department, Partner Neil Andrews said: “It is believed that a successful claimant would recover the fees from the Respondent but we will have to wait and see.”
Damages at present are capped at £74,200 but are likely to be changed to the lower of this figure or 12 months’ salary. Rules on this are expected imminently.
Mr Andrews said: “The Employment Tribunal sees about 180,000 cases per year. The likelihood is that the number of claims will go down.
“Employees will be disincentivised to claim, particularly low value claims. This will be welcomed by employers.”
UNISON has applied for a Judicial Review of the decision to introduce Tribunal Fees as they are seen as a barrier to employees seeking justice in respect of their employment rights.
It was also possible that - as a result of the lower likelihood of claims - employers could reduce the amount offered as settlement under compromise agreements for termination of employment, he added.
The fees could also act as a disincentive for employers to nip a problem in the bud, Mr Andrews warned.
Employers would be more likely to wait until a fee had been paid and until proceedings were issued before considering settlement.
The lower likelihood of claims could also lull employers into being less careful with their company’s employment policies and procedures, warned Mr Andrews.
But this may be a costly mistake. Employers who lose claims could be fined.
“Employers should therefore take advice on the strength of any threatened claim in order to decide how best to respond,” said Mr Andrews.
“The threat of a fine for employers who lose claims is supposed to be an incentive for employers to settle early but we will have to see whether they do.”
Compulsory conciliation is due to return in April 2014 to help reduce the number of hearings.
Mr Andrews doubted it would work because the arbitration service ACAS could be overstretched by the amount of work required: “We have been here before. It didn’t work last time,” he said.
For further information about more employment law changes coming up this summer and commercial litigation, please contact Coles Miller Solicitors Partner Neil Andrews, 01202 673011.