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A New Year for Employment Law

Employment law never stands still, subject as it is to numerous European Directives, but next year will see more changes than usual.  Indeed, 2013 will be the year in which the Employment Tribunal system in the UK will undertake its most significant reforms in decades.  The reforms, mostly to be made under the Enterprise and Regulatory Reform Bill, are part of an attempt by the Government to encourage economic growth and boost employment by cutting bureaucracy for businesses.   The changes are also designed to reduce the number of spurious claims made against employers, increase the number of out of court settlements and make the Tribunal system quicker.

Some changes have already been enforced.  For example, employees who started employment on or after 6 April 2012 have to be continuously employed for 2 years before they have the right to make unfair dismissal claims, as opposed to one year as had previously been the case.  In addition, Employment Judges are now sitting alone (as opposed to with lay members) in unfair dismissal hearings which should make hearings easier to diarise and shorter in duration.  The deposits that claimants with weak cases have to pay has increased as has the maximum costs award.  Furthermore, parties can now be ordered to pay the expenses of witnesses, as opposed to this cost being borne by the state.  

Other changes which will come into force at dates to be confirmed in 2013 are:

•    Employers and employees in dispute will be compelled to undergo a period of conciliation via ACAS to try to resolve/settle the dispute before the employee is permitted to make a claim to the Tribunal;
•    Employees will have to pay a fee to submit a claim to the Tribunal and another fee for the hearing to go ahead.  The fees will be different depending on the type of claim, the maximum total fee being £1,200.  Employers may be ordered to reimburse successful claimants but this is not automatic.  
•    Compensation for unfair dismissal (currently capped at £72,300) will be changed to introduce a cap of between one and three times the national median earnings (around £26,000) or 12 months salary of the claimant in question
•    Employers who breach employee rights where there is one or more aggravating features of the breach will face penalties of 50% of any award made to the claimant subject to a minimum of £100 and a maximum of £5,000.

On the whole, the new legislation is perceived to be largely in favour of employers, especially by the Unions and other employee groups.  How the changes pan out remains to be seen.  What we can be sure of however is that employment lawyers across the country will be kept busy in 2013 grappling with the new rules!

For further information please contact Hannah Roche, Head of Employment, on 0131 226 8216

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