+44(0)20 7638 9271

Employment: Enterprise And Regulatory Reform Act 2013 (ERRA)

The new Act will introduce wide-ranging changes, including the following: mandatory pre-claim ACAS conciliation; new powers for the Tribunal to make a deposit order in respect of part only of a claim or response, new powers for the Tribunal to order that a losing respondent pay a financial penalty; new rules providing that pre-termination negotiations are inadmissible in unfair dismissal claims; a new cap on the unfair dismissal compensatory award; removal of the unfair dismissal qualifying period, where the reason or principal reason for dismissal relates to the Employee’s political opinions or affiliation; new rules outlawing caste discrimination under the Equality Act and the abolition of discrimination questionnaires, as well as a number of other significant changes.

ACAS EARLY CONCILIATION AND NON-DISCLOSURE OBLIGATIONS (PROSPECTIVE DATE APRIL 2014)

Section 7 of the ERRA 2013 introduces new sections 18A (Requirement to contact ACAS before instituting proceedings) and 18B (Conciliation before institution of proceedings: other ACAS duties) into the Employment Tribunals Act 1996 (ETA 1996). Claimants will be required to contact ACAS, who will attempt to promote a settlement, before a claim can be submitted to the Tribunal.

THE NEW MANDATORY FOUR-STEP PROCEDURE BEFORE SUBMITTING A CLAIM TO AN EMPLOYMENT TRIBUNAL

Section 7 (1) of the ERRA 2013 introduces a new section 18A into the ETA 1996. This sets out four steps to the new early conciliation procedure:

Step 1: Before lodging a claim to institute “relevant proceedings” (claims listed in Section 18(1)of the ETA 1996), a prospective claimant must send ACAS “prescribed information” in the “prescribed manner”. “Prescribed” in both of these instances means prescribed by regulations; Step 2: ACAS must then send a copy of the information to a conciliation officer; Step 3: The officer must try to promote a settlement within a “prescribed period”; Step 4: If a settlement is not reached, either because settlement is not possible in the conciliation officer’s view or the prescribed period expires, the officer must issue a certificate to that effect. A claimant may not submit a claim without this certificate. (The officer may continue to promote settlement after the period has elapsed.)

NEW DEPOSIT ORDERS AND COSTS TO BE INTRODUCED FROM 25 JUNE 2013

Section 21 of ERRA 2013 enables the Secretary of State to make regulations giving Tribunals the power to make a deposit order in respect of a specific part of a claim or response (rather than the whole claim or response); and to make an order for payment of witness expenses where it has also made a preparation time order.

FINANCIAL PENALTIES FOR LOSING RESPONDENTS (PROSPECTIVE DATE APRIL 2014)

Section 16 of the ERRA 2013 inserts a new section 12A into the ETA 1996, giving Tribunals the power to order an employer who has lost at Tribunal to pay a financial penalty of up to £5,000 to the Secretary of State, where the case has “aggravating features”.

SETTLEMENT AGREEMENTS AND PRE-TERMINATION NEGOTIATIONS (PROSPECTIVE DATE SUMMER 2013)

Section 14 of the ERRA 2013 prevents pre-termination negotiations from being referred to in evidence in an unfair dismissal case. Section 23 of the ERRA 2013 renames compromise agreements and compromise contracts as “settlement agreements” in all relevant pieces of employment legislation.

UNFAIR DISMISSAL COMPENSATORY AWARD- NEW CAP ON COMPENSATION TO BE INTRODUCED FROM 25 JUNE 2013

Section 15 of the ERRA 2013 will allow the Secretary of State to vary the statutory upper limit on the compensatory award (currently £74,200) in unfair dismissal claims, by way of a statutory instrument. The new limit is intended to be the lower of the current cap or one year’s gross pay.

DISMISSAL FOR POLITICAL OPINIONS OR AFFILIATIONS TO BE INTRODUCED FROM 25 JUNE 2013

Section 13 of the ERRA 2013 will amend section 108 of the ERA 1996 to remove the unfair dismissal qualifying period where the reason or principal reason for the dismissal “is, or relates to, the employee’s political opinions or affiliation”. Section 13 will come into force on 25 June 2013 (section 103(2) ERRA 2013). It will not apply where the effective date of termination is before that date (section 24(3)).

CASTE DISCRIMINATION (PROSPECTIVE DATE 2014 / 2015)

Section 97 of the ERRA 2013 will amend the Equality Act 2010 so that the government must make an order to outlaw discrimination on grounds of caste.

ABOLITION OF DISCRIMINATION QUESTIONNAIRES (PROSPECTIVE DATE EITHER OCTOBER 2013 OR APRIL 2014)

Section 66 of the ERRA 2013 will repeal section 138 of the Equality Act 2010, which deals with discrimination questionnaires.

Please speak to Richard Monkcom or Charles Avens of Druces LLP’s Employment Law team for more information.