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Changes to Employment Law - 29 July 2013

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Major changes come into force today in relation to claims that are filed on or after today's date.

As from today, fees will be payable by claimants upon issue of their claim, and again before a final hearing can take place. Fees will also be payable for applications made by either party along the way. Accordingly, claimants will not be able to commence proceedings without paying the fee. The level of the fee will depend upon the type of claim brought. For simpler claims it will be £160 and for more complicated claims, including notably unfair dismissal, £250. The Hearing fee will be either £230 or £950 depending on the type of case. If a claimant is on Job Seekers Allowance or their monthly income is below a given amount, they will be able to avoid liability for the fees. However, assuming the claimant does have to pay the fee, this is likely to apply their mind somewhat as to the merits of their claim. The aim is to avoid “have a go” claims being submitted in the first place.

From the employer’s perspective, it is likely that the Employment Tribunals will award the fees as well as compensation if the claimant eventually succeeds. You can also expect claimants to seek the fee on top of any settlement sum discussed, or to have to negotiate hard on this point.

Given the median award for unfair dismissal claims of £4,560 (2011/2012), some claimants may view the issue and hearing fees as a gamble that is not worth taking. At the same time, employers may view the likelihood of an additional sting in respect of the fees as a good reason to seek early settlement.

This is merely a small snapshot of the rule changes coming in on 29th July. The likelihood of satellite litigation around the procedural and “extraneous” issues is high.

Coupled with the prohibition on pre-termination negotiations being disclosed in unfair dismissal cases, and the renaming of compromise agreements as “settlement agreements” (both in force from today as well), a wholesale reconsideration of strategy is necessary from the moment you consider taking action towards dismissal.

Please contact patrick.stewart@twmsolicitors.com for further information.

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