There have been lots of changes in the Employment Tribunals and in Tribunal process recently. What changes do HR and in-house legal departments need to know about, and what difference is it already making to tribunal litigation?
New Forms
There are new Form ET1 and ET3s. They are substantively the same as the old Forms, but you will need to use the new ones otherwise your Response will be rejected. In our experience this is being rigorously applied.
Sift Stage
There is a new sift stage in the Tribunal process. That means that the Tribunal now has the power, after the Claim and Response have been presented, to strike out the Claim or Response in full or in part because it has no reasonable prospect of success, or because it does not contain complaints which are within the jurisdiction of the Tribunal. This means that ill founded claims may be struck out at a very early stage more easily by the Tribunal. Equally Responses which have no reasonable prospect of succeeding could be dismissed at the sift stage. The parties will have a chance to make written representations before a Claim or Response is dismissed. On balance this should be a welcome development for employers, since it may mean that fewer unmeritorious claims even make it past the sift stage. Tribunals will be making an assessment on the merits based on the papers which are filed with the Tribunal at an early stage. However, our experience in practice is that the Tribunals are not only reluctant to dismiss discrimination or complex claims at an early stage since they are usually decided based on factual evidence, which the Tribunal would need to hear to make a decision but even to do so for very weak cases. We are yet to any case being sifted out.
Preliminary Hearings
There used to be two different types of interlocutory hearing : case management discussions (which set out directions for the Hearing) and pre-hearing reviews (which determined preliminary legal points). Under the new regime these will both be replaced by Preliminary Hearings which will determine both case management and substantive preliminary issues. This is making running a case more cost effective since it will avoid the need for two interlocutory hearings. Tribunals appear more willing to hold a number of Preliminary Hearings throughout the course of a claim, however, so whilst case management is better costs are not necessarily reduced overall. Generally then this is a welcome trend but it does mean that the parties need to be ready to deal with substantive issues such as whether the employee has actually been dismissed even at the Preliminary Hearing stage. Employers need to ensure that they are clear what issues are going to be considered at these Hearings so that they can be fully prepared to deal with all the issues.
Early Conciliation
From 6 April 2014 there will be a new system of Early Conciliation in Tribunal claims (which will be mandatory for claims after 6 May 2014). This means that there is a duty on the parties and ACAS to try to conciliate a claim before a claim is actually issued. They will be unable to proceed with a Tribunal claim until they receive a certificate from an ACAS Conciliation Officer that conciliation has been attempted. Employers are also to be given the opportunity to request Early Conciliation when they believe that there is a matter which might result in litigation which would benefit from conciliation. This should mean that employers are no longer surprised by claims suddenly landing on their desks with no prior warning, and that they will have an opportunity to resolve cases before litigation is commenced. It may not be successful in every case, but this is likely to be a cost effective way for employers to settle certain cases at a very early stage, before time and legal fees are incurred in defending a Tribunal claim. Requiring the parties to consider settling before litigation has even commenced could result in some cases which would otherwise have litigated not even making it as far as the issuing of the Claim.
More ACAS Conciliation
The Employment Tribunal is also under a new duty to encourage the parties to use alternative dispute resolution (such as ACAS or judicial or other mediation), and will consider this at the Preliminary Hearing stage. This will already be a consideration in many cases, but it may be a useful development in some cases where the parties have not otherwise managed to engage in or progress any without prejudice negotiations. For example, when an employee bringing a claim is unrepresented, they may have unrealistic expectations of likely settlement awards, so involving ACAS could facilitate a settlement by helping the employee to understand the parameters within which a Tribunal could make an award.
Issue and Hearing Fees
There is a new requirement for Claimants to pay an Issue Fee (£160 or £250) when they lodge a Claim with the Tribunal. Additionally, prior to the Hearing itself Claimants will need to pay a Hearing fee of £230 or £950), which in itself may deter some Claimants from bringing proceedings. This has been the subject of Judicial Review application, the argument being that the introduction of fees breached the EU law because it made it “virtually impossible or excessively difficult” for individuals to bring a claim, and also that it was indirectly discriminatory against women. On 7 February 2014 the High Court dismissed Unison’s challenge to the introduction of fees, but the union intends to appeal.
In practical terms, the introduction of fees for Tribunal Hearings is already reducing the number of claims being brought. The Ministry of Justice figures revealed that in total there has been a 17% reduction in the number of claims lodged in July, August and September 2013 compared with the same period in 2012 (although the statistics are not conclusive). It remains to be seen what the longer term effect of the introduction of fees will be. The Government anticipates that the introduction of the fees will cause claims to fall by around 25%. However, employers will have to bear in mind when these fees will fall due when they are negotiating with an employee to try to settle a claim. For example, it would be preferable to try to settle a claim before the £950 Hearing fee falls due, otherwise an employee is likely to add this sum to their settlement proposals which will ultimately cost the employer more.
Rebecca Davidson is a Senior Associate and can be contacted for more information about this article at rdavidson@foxwilliams.com
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