In January 2011, the Department for Business Innovation and Skills (BIS) launched a Resolving Workplace Disputes consultation covering wide-ranging reforms to the employment tribunal system. The primary aims of the consultation were to achieve more early resolution of disputes without the need for tribunals, a "swift, user-friendly and effective" tribunal system, and to help businesses "feel more confident about hiring people".
The consultation closed in April 2011 and BIS published its response on 23 November 2011, on the same day that it announced a host of other reforms in employment law (see below). The outcomes of the consultation are as follows:
Mediation
The Government will undertake a "long term reform programme" to increase the use of mediation to resolve disputes. It proposes to work with the private sector to share knowledge of mediation with smaller businesses. It will:
- Undertake a pilot, to run in the retail sector (which has already invested in in-house mediation services), to explore how retailers can share their expertise with smaller employers in their supply chain.
- Fund a mediation training scheme, to create networks of mediators that could provide low-cost mediation to other organisations in their network. This will be developed as a regional pilot at first.
Compromise agreements
The Government will:
- Consult on whether and how to enable compromise agreements to cover all existing and future claims without the need for a full list of causes of action.
- Consult on "protected conversations" (see below).
- Consider how to draft a standard text and guidance for parties to use.
- Review the advice and guidance on compromise agreements available to employers and employees.
- Consider changing the title of "compromise agreement" to "settlement agreement".
Early conciliation
The Government will introduce the following measures:
- Claimants will be required to submit details of their claim to Acas at first, at which point they will be offered the option of early conciliation. If it is refused by either party, or is unsuccessful, the claimant will be able to make their tribunal claim. The period for early conciliation will end after one month.
- Claimants will have a period of one month in which to submit their tribunal claim following the completion of early conciliation. This will "stop the clock" on tribunal limitation periods where early conciliation is entered close to the end of that limitation period.
- Parties in all claims will be offered early conciliation, apart from where statutory time limits preclude it.
- Early conciliation will be offered in multiple claims, regardless of the size of the group.
- Acas conciliators will be able to extend the conciliation period by a further two weeks where there is a reasonable prospect of settlement and with the parties' agreement.
- Acas will now have a duty to conciliate pre-claim, rather than a power.
- A simple form will be introduced to be used in the process.
- Acas will be provided with greater resources, funded by the savings that the Exchequer is expected to make as a result of a fewer claims reaching the tribunal.
Modernising tribunals
This section of the consultation response deals with issues arising from the tribunal process. Following the responses received, the Government has invited Mr Justice Underhill to undertake a Fundamental Review of Employment Tribunal Rules which is due by April 2012. In the meantime, the Government has decided upon a number of matters including:
Case management
- The limit for deposit orders will be increased from £500 to £1,000.
- The limit for costs awards will be increased from £10,000 to £20,000.
Witness statements being taken as read
Witness statements will be taken as read unless a judge or tribunal directs otherwise.
Judges sitting alone
Unfair dismissal cases in the tribunal will now be heard by a judge sitting alone, unless they direct otherwise. Progress on this change will be reviewed in one year's time. Less controversially, EAT judges will now always sit alone unless they direct otherwise.
Unfair dismissal
As previously announced, the unfair dismissal qualifying period for all businesses will increase to two years, probably from April 2012.
Financial penalties for employers
Financial penalties against employers may be introduced. These penalties will be levied against an employer who loses a tribunal claim and will be in addition to the damages awarded to the claimant. The penalty will be half of the total award made by the tribunal, with a minimum threshold of £100 and a maximum ceiling of £5,000. Where a non-financial award is made, the tribunal can ascribe a monetary value. The penalty will be reduced by 50% if paid within 21 days. However, the levy of a financial penalty will not be automatic, and will instead be at the tribunal's discretion. An employer can appeal against the imposition of a financial penalty.
Rapid Resolution scheme
The Government will launch a consultation on introducing a "Rapid Resolution" scheme to provide swifter and cheaper determinations in low-value, straightforward claims. This could involve non-judicial determination based only on papers, thereby avoiding the need to engage judges and a full oral hearing.