The Government has opened a consultation on reforming the employment tribunal service.  Its stated intention is "to remove barriers to recruitment so that businesses have the incentive and ability to expand, ensure they provide maximum flexibility and promote competition without compromising fairness". 

The Government is keen to promote early resolution of conflict, and the consultation seeks views on workplace mediation and the use of compromise agreements.  It is also clear that the Government wants to reduce the caseload of the tribunal service and reduce spending to meet the budgetary constraints imposed on the Ministry of Justice.  Set against this background, there is a desire to maintain access to justice, but to do so within stricter financial controls.

The key proposals include the following:

  • Increasing the minimum length of service required to raise a claim of unfair dismissal from one year to two years.
  • Imposing financial penalties on employers who are found to have breached the law.  These penalties will be payable to the Exchequer, in addition to any award to the claimant, and it is proposed that they should be half of the amount of the total award subject to a minimum of £100 and a maximum penalty of £5,000.
  • Requiring claims to be lodged with ACAS before going to tribunal.  The proposal is to allow one month for conciliation, and to allow a shortened claim form (ET1) to be used in an attempt to reduce costs. 
  • Allowing judges to strike out claims at any hearing (and not just at a Pre-Hearing Review, as is currently the case), or without hearing the parties or giving them the opportunity to make representations.  Additionally, where a respondent is of the view that the ET1 does not provide sufficient information about the complaint, the respondent will be able to lodge a response simply stating that further information is required, and apply for (i) an "unless" order by which the claimant must provide certain information or face a strike out, or (ii) the claim to be struck out without further process. 
  • Increasing the deposit that either party can be required to pay where a case is viewed as having little prospect of success from £500 to £1,000.  Also, views are being sought as to the test for imposing such a deposit, including views on whether the number of previous claims made by the party should be taken into account.    
  • The maximum cap on a costs award or a preparation time order will be increased from £10,000 to £20,000. 
  • Additional information about the complaint will be required from claimants.  Specifically, a schedule of loss will be incorporated in the ET1.
  • Where a party makes a reasonable offer to settle, and the other party rejects that offer, such rejection will be taken into account when the employment tribunal is assessing any award of compensation.  When no award is made (i.e. the claimant loses) and a reasonable offer has been made, the fact of that offer could be used to consider whether the claim was brought "vexatiously, abusively, disruptively, or otherwise unreasonably", potentially leading to costs being awarded against the claimant.
  • Widening the number of cases that can be heard by judges sitting alone (rather than a panel of three) to include cases concerning unfair dismissal.

The consultation closes on 20 April 2011. 

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