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Changes In Employment Law From 29 July 2013

From Monday 29 July 2013, the following 5 changes to UK Employment law will take effect:

COMPROMISE AGREEMENTS WILL BE RENAMED SETTLEMENT AGREEMENTS

Compromise agreements will be renamed “settlement agreements” under section 23 of the Enterprise and Regulatory Reform Act 2013 (“ERRA”). The use of these will be facilitated by new rules in relation to pre-termination negotiations.

PRE-TERMINATION NEGOTIATIONS BECOME INADMISSIBLE IN UNFAIR DISMISSAL PROCEEDINGS

Evidence of pre-termination negotiations between an employer and employee will be inadmissible in ordinary unfair dismissal claims under section 14, ERRA 2013 unless there has been ”improper behaviour” . This goes further than the “without prejudice” principle as it will apply even where no formal dispute has yet arisen.

CLAIMANTS START PAYING A FEE TO SUBMIT A CLAIM TO AN EMPLOYMENT TRIBUNAL

A claimant will now be required to pay a fee at the issue of their claim (an issue fee). If the claim does proceed to a full Tribunal hearing, the claimant will be required to pay a subsequent fee (a hearing fee), provisionally around four to six weeks before the hearing date. Tribunal judges will have a power to order the unsuccessful party to reimburse the fees paid by the successful party, although this will be at the judge’s discretion rather than an automatic right. The level of the fee will depend on the type of claim.

There are two types of claim: Level 1 claims and Level 2 claims, which are as follows: Level 1 claims comprise more straightforward and lower value claims, generally for sums due on termination of employment (such as unpaid wages, redundancy payments and payments in lieu of notice), which are less costly to administer and adjudicate. Level 2 claims comprise all other claims, including unfair dismissal, discrimination, equal pay and whistleblowing claims. The Government consultation proposed that where a claimant submitted more than one type of jurisdictional complaint, the fee payable would be that which relates to the highest level claim.

The fees are as follows:

Level 1 claims have an issue fee of £160 and a hearing fee of £230

Level 2 claims have an issue fee of £250 and a hearing fee of £950

NEW EMPLOYMENT TRIBUNAL RULES

Changes to Employment Tribunal rules include combining pre-hearing reviews and case management discussions into a preliminary hearing; revised powers for Tribunal Judges to strike out weak cases; and a requirement that an Employment Tribunal must, where appropriate, encourage parties to use alternative dispute resolution.

REDUCED CAP ON THE COMPENSATORY AWARD FOR UNFAIR DISMISSAL INTRODUCED

Section 15, ERRA 2013 will give the Secretary of State wider powers to vary the statutory upper limit (or “cap”) on the compensatory award in unfair dismissal claims. The Unfair Dismissal (Variation of the Limit of Compensatory Award) Order 2013 will set the new limit as the lower of the current cap (£74,200) or one year’s gross pay.

If you would like any further information on this or any other employment related matter then please do not hesitate to contact the Druces LLP’s Employment Team.

This note is not intended as legal advice, but as general guidance only as at 30 July 2013

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