29 July 2013

Keep up with employment law changes

Make sure you're aware of the employment law changes taking affect today, including having to pay to lodge a claim or appeal in the Employment Tribunal.

Today major changes in UK employment law are being implemented.

As an employer, it is vital you keep up to date with the law in this area. One of the main changes is that from now on people will have to pay to lodge a claim or an appeal in the Employment Tribunal.

Employment Tribunal charges

The level of fees that must be paid are split into two levels. Level one claims include those relating to wages, equal pay, redundancy, holiday and time off and breach of contract. The fees for level one come to a total of £390 – £160 to lodge a claim and £230 if the matter ends up in an actual hearing.

Level two claims are for more complicated matters including unfair dismissal and discrimination.The fees are £250 to lodge a claim and £950 for a hearing – £1,200 in total.

The fees must be paid in advance, but whoever loses at the tribunal may be ordered to cover the cost of the successful party’s fees.

Benefit to employers

Tar Tumber, Workplace Law HR Consultant, says the change could benefit employers as it will hopefully reduce the risk of someone making a malicious claim.

But he says: “The down side is that employees who genuinely have a case for discrimination or are being treated unfairly may also be put off from raising a claim. That said, there will be a ‘means tested’ system for those claimants who earn a very low wage or are unemployed whereby the fees may be partly or wholly waived.”

Other changes will include a cap on the amount someone can claim for unfair dismissal. The maximum limit for anyone who is dismissed from their job from today is £74,200 or one year’s gross pay, whichever is the lower amount.

Knowing what the maximum amount a former employee could potentially be awarded for unfair dismissal should help companies plan for the worst case scenario if a claim is ever made against them.

Open and honest discussions

The new legislation renames compromise agreements to settlement agreements. And any pre-termination discussions will no longer be able to be referred to in evidence during unfair dismissal cases, unless there has been improper behaviour. The idea behind this move is to allow both the employer and employee to discuss any issues openly and honestly without worrying that what they say may be used against them at a tribunal.

But Mr Tumber says: “The concern is that employers could misconstrue this as being a ‘green light’ to have inappropriate conversations and simply exit staff from the business. This behaviour is not protected and employees in such situations may be able to raise claims of discrimination and refer to the ‘off the record’ conversations at a later date.”

Geoffrey Mead, employment law partner at global law firm Eversheds, says: “Although a number of significant changes will be coming into effect, none are so controversial as the introduction of fees for bringing a claim before the employment tribunals, which the Government hopes will transfer some of the cost of running the tribunal system from the taxpayer to those who use the system. The controversy is amply demonstrated by two challenges to the new fees regime by way of judicial review, as a result of which the Lord Chancellor has given an undertaking that any tribunal fees paid after July 29 will be repaid if it is determined that the fees regime is unlawful.

“It remains to be seen whether this measure will also reduce the number of claims presented to the employment tribunals but many believe that that is another likely result of the introduction of the fees regime.”

How to avoid a tribunal

As an employer it is essential to follow proper disciplinary procedures if you have an issue with a member of staff’s performance. Make sure you stick to the terms of the employment contract as well as insisting your employees follow it too.

If you think a member of staff is performing poorly, make sure you try to take steps to address this quickly by talking to the employee and trying to work out a way of improving the situation before it worsens. Remember that good staff morale is likely to also boost staff productivity, so by keeping a pleasant work environment for your team your business will flourish.

If you do need to let staff go, always be sure to follow the correct procedures and take professional legal advice  if you have any worries or concerns.