Global Employment Law

Green Light for Unfair Dismissal Reform and Tribunal Fees

By Richard Lister

LS Scales of JusticeII.jpgThe UK Government has confirmed that it will be increasing the qualifying period for claiming unfair dismissal from one to two years and introducing fees for bringing employment tribunal claims.

These were two of the most significant proposals contained in a consultation document on reforming employment tribunals and the resolution of workplace disputes, published by the Department for Business, Innovation & Skills (BIS) last January. At the Conservative Party conference on 3 October 2011, the Chancellor of the Exchequer, George Osborne, announced that both reforms are to be implemented. This pre-empted the Government's formal response to the consultation, which is expected shortly.

Unfair Dismissal

A BIS press release published on the same day revealed that the change to the unfair dismissal qualifying period will take effect on 6 April 2012, but gave no information as to what the transitional arrangements for existing employees would be.

The stated purpose of the reform is to encourage employers to take on new employees, with the Government estimating that the number of unfair dismissal claims will drop by around 2,000 a year. But the change is hugely controversial, with predictions that it will merely have the effect of encouraging more discrimination and whistleblowing claims, which apply from "day one" - i.e. there is no qualifying period.

Trade unions are naturally vehemently opposed to the change but even some employer organisations are questioning the merits, including the Chartered Institute of Personnel and Development.

Fees for Employment Tribunal Claims

The Chancellor's speech on 3 October also included a commitment "to introduce for the first time ever a fee for taking a case to a tribunal that litigants only get back if they win". As yet, there are no official details of how this will work and it seems that a consultation on fees will be launched later in the autumn. According to the BBC, the projected implementation date is April 2013.

There is serious opposition to this proposal too, primarily on the basis that fees are likely to have the unfortunate effect of deterring genuine claims as well as spurious and weak ones. It has also been suggested that it will merely ratchet up the cost of settling cases, with claimants expecting to recoup any fee from their employer.

There have been unconfirmed media reports that the fee for issuing a tribunal claim will be £250, with a further fee of £1,000 payable by the claimant when the hearing is listed (and even higher fees if the claim exceeds £30,000). No source is given for these figures and the Government's forthcoming consultation will reveal whether or not they are genuine.

It does at least seem clear that any fee will be recoverable by the claimant if successful, but will that mean that the tribunal will make a refund or order the employer to pay it? If the latter, this would chime with another proposal in the January 2011 BIS consultation paper - imposing financial penalties on employers found to have breached their legal obligations.

Photo cerdit: Ericsphotography