New tribunal rules: will they help employers?
On April 6 2012 some new tribunal rules came into effect which are designed to help employers. What’s happened and, more importantly, are these procedural changes really going to do any good?
Unfair dismissal law changes
As we previously reported, the qualifying period for an unfair dismissal claim increased from one to two years on April 6 2012. However, this change only applies to those employees hired on, or after, this date – the rights of those who were in employment with you before then remain intact. The government has justified this controversial decision on the grounds that it encourages employers to hire new staff.
In addition to this change, two new pieces of legislation relating to tribunal procedure came into force on the same date. Together they’ve introduced a number of changes all of which the government says are designed to help employers who are involved in, or could potentially be facing, a tribunal claim. So what’s happened here exactly and is this assertion really true? Let’s start by looking at the various amendments.
Costs cap raised to £20,000
Firstly, where an employee loses a claim, or it becomes apparent that they’ve made false or malicious allegations, the tribunal now has the power to award the employer £20,000 in respect of their legal costs. Previously, this limit was £10,000 (which doesn’t really go very far when lawyers are involved). This factor alone could deter a claim.
It’s only fair. Also, the tribunal is being encouraged to make a costs order wherever “it is appropriate”. This should lead to more awards of this nature being made in the future.
Speed up the process
In addition, tribunal judges will now take witness statements “as read” (unless they direct otherwise) and hear all unfair dismissal claims “sitting alone”. Until now they’ve always been accompanied by two lay panel members. Whilst this makes sense to an extent (partly because it frees up valuable tribunal time), it does mean that only one person will now decide on the outcome of an unfair dismissal case.
Risk. Whereas before the lay panel members could “out vote” the judge – perhaps in the employer’s favour – this possibility has now, effectively, been removed. Unfortunately, only time will tell if this is a positive change.
Deposit orders and expenses
Finally, the maximum deposit the tribunal can order a party to pay as a condition of being allowed to continue with tribunal proceedings has risen from from £500 to £1,000. This amount could potentially dissuade a claimant from continuing with their claim. It’s also been given the power to direct that the parties pay and/or reimburse witnesses’ expenses, i.e. they don’t come from tribunal funds. This could increase overall costs.
Tip. There’s clear thinking behind all the procedural changes, the most beneficial to employers being the raise in the costs cap. So if you’re threatened with a claim, don’t forget to point this new limit out.
The fact the tribunal can now award a successful employer £20,000 (rather than £10,000) in respect of its legal costs is good news. However, unfair dismissal claims being heard by one judge sitting alone, rather than three panel members, means the decision rests with them. Only time will tell if this is a good move.
“Tips & Advice Indicator” 13.4.12