Alex Jones

Legal Matters with Howlett Clarke

New employment tribunal laws welcome but not perfect

New rules designed to reduce the number of employment tribunals have been announced and broadly speaking can be welcomed as a positive step for employers and staff.

Under the changes, staff seeking to bring a case against an employer will first have to notify the Advisory, Conciliation and Arbitration Service (ACAS). This will be mandatory after May 6 although businesses and employees will not be required to settle a claim through the process and can still choose to go to a tribunal.

This move, known as the Early Conciliation scheme, will go a long way to prevent tribunals reaching court where high costs are incurred and the process made more lengthy and stressful, and that’s good news for all concerned.

However, not all changes made in recent months are as positive, such as the controversial new fee structure for bringing employment tribunals which faces further change and is at the centre of a legal challenge.

The fees, which rise depending on how complex the tribunal is, have led to a staggering 79% fall in the number of tribunal applications. While good news for employers, this does not represent the number of unmeritorious employment tribunal claims as the government would like us to believe, but instead reluctance by staff to risk paying the fee and then losing the case.

Trade unions have called for the fees to be scrapped or reduced and my feeling is the fee structure could collapse altogether. The government may then be forced to refund all the fees paid to date, which will be an administrative nightmare.

Research shows that the early conciliation scheme could save the British economy several million pounds a year. Employers also save several thousand pounds in management time and legal costs compared to dealing with a tribunal case.

But I also share the concerns of some that ACAS is currently not adequately resourced to deal with a potential explosion in cases. A backlog will create frustration and it remains to be seen what effect simply having to notify ACAS will have on the number of cases that do end up in court.

On balance, I feel the new scheme will make it easier for employers to deal with relatively minor employment disputes, which have also decreased significantly since the introduction of new fees to bring employment tribunals.

Overall, attempts to reduce the cost of employment tribunal claims for employers and at the same time maintain workers’ rights in the workplace must be welcomed.

By Alex Jones, employment law specialist with QS Howlett Clarke.

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