There has already been a number of changes to the rules regarding unfair dismissal:

  • An increase in the qualifying period, meaning that in order to claim for unfair dismissal, an employee needs to have been employed for two years or more.
  • With a view to achieving a settlement, Employers can now have “off the record” conversations with employees. There are restrictions with this however, as detailed in our earlier article, which you can find here.
  • The compensation that can be claimed for unfair dismissal is now capped at the less of one years salary or £72,400.
  • If a Claimant wishes to proceed with a Tribunal claim, they now have to pay a fee. There is an issue fee of £250 and a Hearing fee of £950 for unfair dismissal.

Employers have mostly welcomed the above changes, however, from 6th April 2014 some further changes may not be so welcome.

Penalties

The first change involves penalties. Employers may have to pay a penalty to the Employment Tribunal if it loses a claim for unfair dismissal (or any other claim for that matter). Subject to a minimum of £100 and a maximum of £5,000, the penalty will be 50% of the amount of the award. If the employer pays 50% the penalty within 21 days, then its liability will reduce. However, this must be paid to the Secretary of state, not the claimant.

The Tribunal must order for a penalty to be paid, it will not apply automatically.

Early Conciliation

Early conciliation shall replace the current pre-claim conciliation. Presently, ACAS provides assistance to try and settle a dispute between the parties before they reach an Employment Tribunal. A new mandatory conciliation process will be introduced from 6th April 2014 (to take effect from 6th May 2014). There will now be four steps to the early conciliation process:

  • ACAS will require the employee to send “prescribed information” in the “prescribed manner”. You may think that such information might include some detail about the claim, however, the prescribed information required is simply the contact details of the parties. It can also be provided verbally.
  • An Early Conciliation Support Officer (ESCO) will then contact the employee upon receipt and send the information to the employer, once they have sought approval.
  • Following the information being passed to the employer, the ACAS Conciliator is then given one month to try and settle the claim (the “prescribed period”). If agreed between the parties, this can be extended by two weeks.
  • If within the prescribed period no settlement is reached, ACAS must provide the employee with a certificate which will have a unique reference number they will need to issue their Tribunal claim.

This conciliation process effectively “stops the clock” on the three month time limit the employee has to issue Tribunal proceedings.

Conclusion

Practically, it is hard to determine how many employers will choose to engage in settlement discussions with employees before a claim has been issued. In addition, now employees are required to pay fees to issue their claim (for unfair dismissal this totals £1,200) is an attempt to settle the claim before Tribunal the right time?

If you would like to discuss any issues raised in this article then please contact your dedicated solicitor.