Employment law changes: past and present

Image

The 6th April 2014; a key date in any employment lawyer’s diary. Year on year, the start of a new financial year means the introduction of new employment laws to coincide. This article will first look back and analyse the impact of last year’s changes, before providing a whistle-stop tour of the new changes coming into force today.

The most notable employment law change last year was the introduction of fees for people bringing claims to the Employment Tribunal. Before these changes it was free; you could bring a claim against your employer without paying anything. Moreover, without the prospect of being made to pay costs if you were unsuccessful. On 29 July 2013 fees were introduced. This meant that, for someone to make an application to the tribunal and have a hearing, they would have to pay either £390 or £1200; dependent upon the type of claim being made, with most falling into the later, higher priced, category.[1] In addition, when these fees were first introduced there was no standard assumption that if you were successful you would be entitled to have your employer cover the costs you paid, in addition to any award you receive. Therefore, if your employer owed you £400 in unpaid wages, you took them to the tribunal and paid £390 for the pleasure; if you were successful you would be awarded your £400. However, in reality, as it has cost you £390 you have only gained a meagre £10. Where is the justice here?

Fortunately, this was partially addressed following comments made by the Employment Appeal Tribunal and the High Court. The Government issued new guidance for Employment Tribunals which now states, ‘the general position is that, if you are successful, the respondent will be ordered to reimburse you’.

Nevertheless, what have the impact of these changes been?

First, and most importantly, official statistics show that the number of claims received in October to December 2013 was 9,801 – 79% fewer than in the same period of 2012, and down 75% on the period July to September 2013. Moreover, sex discrimination claims have dropped by 77% compared to the same period in 2012 and by 82% compared to the previous quarter. And there have been 83% fewer equal pay claims compared to the same period in 2012 – 85% less than the previous quarter.[2]

Unison, Britain’s largest trade union, challenged the Government’s decision to bring in fees for Employment Tribunals in the High Court. They argued at a hearing in November last year that the introduction of fees would restrict access to justice for workers and would therefore be unlawful. Unison’s challenge was unsuccessful, even though the High Court appeared to accept many arguments about the likely impact of the fees on barring access to justice for workers treated unfairly by employers. The court stated that more time was needed to fully assess the impact.

The impact of the fees introduction has been summed up by Dave Prentis, General Secretary of Unison, who said:

“The figures out today are shocking and the disastrous impact of tribunal fees is now blatantly obvious. The introduction of fees was unfair and they should be dropped, which is what we hope to argue in the Court of Appeal. Money should never be a barrier to justice, so it is deeply disturbing that this is exactly what is happening for thousands of workers since the fees were introduced. UNISON warned all along that tribunal fees would deny workers access to justice and these claims are being borne out already. The union wants to take the case further to allow the Court of Appeal to consider its arguments, in particular that the introduction of fees has a disproportionate impact on women.”[3]

So what are the new changes coming into force today?

There are two main changes. First, an early conciliation scheme has come into force. From 6 April 2014, before lodging a claim to the Employment Tribunal, all claimants will need to notify Acas first, who will offer conciliation. For claims issued between 6 April and 5 May, early conciliation will be voluntary but for the majority of claims issued on or after 6 May, it will be mandatory. If conciliation is unsuccessful within the set period the claimant can then proceed to lodge a tribunal claim.

Acas is an organisation that has existed in different forms since 1896. It works with employers and staff to improve work relations and solve disputes. Acas stands for Advisory, Conciliation and Arbitration Service, which sums up its primary functions. The organisation also provides training and free advice.

Employment relations minister, Jenny Willott, said the early conciliation scheme was “good news for employees and employers…It will help them resolve their workplace disputes, avoiding the stress, time delays and excessive costs all too often associated with tribunals.” [4]

Second, the Tribunal has also been given new powers to impose financial penalties on employers; they can order an employer who has lost a case to pay a financial penalty to the Secretary of State. If an employer loses a case and is shown to have especially poor workplace practices, it could be fined up to £5,000 on top of any back pay that is due to the employee.

The TUC (Trades Union Congress) said the fines would create a welcome new incentive for bosses to respect the rights of their staff rather than risk increased financial penalties.[5]

Some other changes coming into force today also include:

  • The maximum fine for employers caught employing a worker who is subject to immigration control but who does not have the right to work in the UK increases from £10,000 to £20,000.
  • The Percentage Threshold Scheme which enables some employers to reclaim Statutory Sick Pay from HMRC is abolished.
  • The statutory discrimination questionnaire process will be abolished and replaced by a voluntary process of questions and answers in accordance with new ACAS Guidance.

What effect will these changes have?

As with all changes the effects cannot always be predicted. The intended effects of the early conciliation scheme are to encourage parties to resolve their disputes before going to the tribunal. This echoes the recent changes in family law, whereby parties are being encouraged to mediate before taking cases to the family courts. The government are trying to stress that the courts should be the last available option.

With regard to the powers of the tribunal to make fines; as stated, this is intended to encourage employers to respect the rights of their staff. With the maximum fine set at only £5,000 this is only likely to deter smaller employers, who would be more effected by such a fine. £5,000 to a large corporate company is like a drop in the ocean.

The actual impact of any changes will not be available to see until time has been given to analyse the actual effects. This article will be continued when such data is available.

 

06/04/2014

Dale Timson

LLB (Honours) Student & Aspiring Barrister

 

[1] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254326/T435_1113.pdf [Accessed on 06/04/2014]

[2] https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/289342/tribunal-stats-oct-dec-2013.pdf [Accessed on 06/04/2014]

[3] http://www.unison.org.uk/news/dramatic-fall-in-tribunal-claims-shows-disastrous-impact-of-fees [Accessed on 06/04/2014]

[4] http://www.bbc.co.uk/news/uk-26908608 [Accessed on 06/04/2014]

[5] http://www.bbc.co.uk/news/uk-26908608 [Accessed on 06/04/2014]

 

Advertisements

One thought on “Employment law changes: past and present

  1. Really thanks author for your useful blog and great shared to law service

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s