Employment Law Update

A number of important changes in employment law and practice happened on 29 July 2013 including the introduction of fees in the employment tribunal, new rules of procedure and a new cap on the compensatory award for unfair dismissal.

Fees

Fees for issuing a claim and for the hearing of a claim are now payable by a claimant. The amount of fees payable depends on the type of claim. For example, claims for unfair dismissal or discrimination will attract fees of £250 for issuing and £950 for a hearing. The tribunal will have discretion as to whether these fees will be paid by the employer if the claim succeeds.

Rules of procedure

A number of substantial changes aimed at increasing the speed, efficiency and proportionality in the tribunal system have also been introduced. This includes new forms for the bringing and defending of claims, wholesale changes to the rules, and the introduction of an initial paper sift by an employment judge.

Cap on the compensatory award for unfair dismissal

The compensatory award in unfair dismissal cases is now limited to the lower of one year’s gross pay or £74,200. The new cap applies where the date of termination is after 29 July 2013.

The compensatory award is to compensate a claimant for the loss caused by their dismissal. Whilst a cap of one year’s salary is designed to favour the employer, in reality the vast majority of awards will continue to be much lower. For instance the average unfair dismissal award was £9,133 in 2011/12 with only 2% of awards exceeding £50,000.

Further developments

There are a further raft of important changes in the pipeline for next year and beyond which will have a significant impact on the way employment claims are dealt with and consequently on the strategy for dealing with potential claims in the workplace.

Please contact Claire on Claire.Ingleby@mb-law.co.uk for further advice.

Please note this information is for general guidance only and is not intended to be a substitute for specific legal advice.