Employment law update: financial penalties for employers

From 6th April 2014 Employment Tribunals will have the discretion to levy financial penalties for employers for breaches of employment law.

The changes are introduced by Section 16 of the Enterprise and Regulatory Reform Act 2013 which amends Section 12 of the Employment Tribunals Act 1996.

These penalties will be in addition to any compensation which is payable to the employee however the Employment Tribunal will only be able to levy a penalty where there are one or more “aggravating features”. The imposition of the levy will be completely at the discretion of the Employment Tribunal however the Employment Tribunal will have much less discretion over the amount of the penalty, which must be 50% of the amount of compensation awarded to the employee (subject to a £5,000 cap). There is a 50% discount on the levy if paid within 21 days. The levy goes to the Secretary of State and not the employee.

The Employment Tribunal must have regard to an employer’s ability to pay when deciding whether to order the employer to pay a penalty.

This comes shortly after other changes which could affect how much employers who lose claims will pay.

Fees in the Employment Tribunal

Fees were introduced for Employment Tribunal claims commencing after July 2013. When they were introduced it was unclear whether employers would be ordered to pay the fees of successful claimants however recent guidance from the Lord Chancellor indicates that losing employers should be ordered to reimburse the fees paid.

ACAS Code of Practice

Employment Tribunals can increase the compensation payable to employees by up to 25% where the employer has failed to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures.

Comment

It has always been the case that employers can pay a heavy price for failing to comply with employment laws. However the situation is now much worse for employers in breach of employment law.

Employers wishing to discipline, dismiss or make redundant employees should ensure that they follow all the necessary procedures and any employer who is unsure should seek advice.

Hastings & Co Solicitors specialise in litigation and employment law.

T. 01245 835 305.

Disclaimer: this blog is only intended to give a brief overview of the law and is not intended as a substitute for independent legal advice.

Employment law update: early conciliation

The Employment Tribunals (Early Conciliation: Exemptions and Rules of Procedure) Regulations 2014 comes into force on the 6th April 2014 introducing compulsory “early conciliation”, also known as “pre-claim conciliation”.

From 6th April 2014 Claimants must contact ACAS before issuing a claim in the employment tribunal. There is no actual requirement to engage in conciliation however ACAS will offer conciliation.

The rules can be summarised as follows:-

1. Before issuing a claim in the employment tribunal Claimants must either fill in the early conciliation form (this can be done online or by post) or telephone ACAS. Initially, the only information that the Claimant has to give is the Claimant’s name and address and the employer’s name and address.

2. ACAS must then make reasonable efforts to contact the Claimant and if the Claimant consents they must make reasonable efforts to contact the employer.

3. The parties then have one calendar month to try and reach a settlement (although this may be extended by up to 14 days if the parties consent).

4. If a settlement is not reached or the ACAS conciliation officer considers that a settlement is not possible, ACAS must issue an Early Conciliation Certificate. Only then may the Claimant submit claim in the employment tribunal.

5. The Early Conciliation Certificate will contain a certificate number which the Claimant will need to insert on the ET1 claim form.

What about time limits?

The usual time limits stop during the early conciliation period and if the usual time limit for issuing a claim would otherwise have expired during the early conciliation period, the Claimant benefits from a month’s extension of time from the end of the conciliation period.

Hastings & Co Solicitors specialise in all aspects of employment law including disputes. For further advise or assistance please telephone 01245 835 305 without any obligation.

Disclaimer: this blog is only intended to give a brief overview of the law and is not intended as a substitute for independent legal advice.

Changes to Employment Law on 29 July 2013

Employment Law Update

Liam Hastings of Hastings & Co Solicitors based in Chelmsford, Essex looks at recent changes to employment law.

A number of changes came into force yesterday including:-

1.    Fees are being introduced in the Employment Tribunal

Employees wishing to start claims in the Employment Tribunal must now pay fees. The fees are paid in two stages. The first fee is paid when the claim is issued and the second fee is paid shortly prior to the claim being heard.

There are two sets of fees. For basic claims eg unpaid wages the initial fee will be £160 and the hearing fee will be £230. For more complicated claims eg unfair dismissal claims the initial fee will be £250 with a £950 hearing fee.

In some instances Employers will be ordered to pay fees also, for example if making a counterclaim or on appeal to the Employment Appeal Tribunal.

The Tribunal will have discretion to order the losing party to reimburse the winning party of the fees paid.

Employees on low incomes will be able to apply for a fee remission. Nonetheless, employee groups are worried that this will deter employees from bringing genuine claims.

This is probably good news for employers as less claims will be made.

2.    New unfair dismissal compensatory award

The unfair dismissal compensatory award limit will become the lower of the statutory cap (currently £74,200) or one year’s pay. The new cap will apply where the effective date of termination is after 29 July 2013.

3.    Compromise agreements to be renamed settlement agreements

“Compromise agreements” will now be called “settlement agreements”. However, they will operate in the same way as before.

4.   New employment tribunal rules of procedure

The new rules of procedure will replace the old rules and simplify the procedures.

5.   Pre-termination settlement discussions

Most offers made or discussions held with employees with a view to terminating their contract of employment will be inadmissible in any  subsequent unfair dismissal proceedings. So, for example, an employer will be able to make an offer to terminate an employee’s employment without fear of the employee referring to the offer in subsequent unfair dismissal proceedings. However, employers need to be careful as there are certain exceptions and the offers/discussions will not apply to other types of claims for example discrimination claims.

Hastings & Co Solicitors specialises in employment law. Contract Liam Hastings on 01245 835 305 for further advice or assistance.

Disclaimer: this is a very brief overview of the changes introduced yesterday and not intended as a substitute for legal advice.