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At last – some good news for employers?

Last week the government announced two changes to employment tribunals to be introduced in the summer.  The government is tackling the “claims culture” whereby employees bring a claim against their employer in the hope of getting a pay-off knowing that it is often cheaper for the employer to settle a claim than fight it and win.

 For the first time since the introduction of employment tribunals in the 1970s employees are going to have to pay a fee to present a claim to the employment tribunal.  When the proposal was originally put forward the government stated that their rationale for introducing fees was to reduce the number of weak claims in order to help businesses.

Hopefully this will lead to a reduction in claims which have little merit or prospects of success.  To bring a claim for unfair dismissal an employee will have to pay a fee of £250 just to present their claim to the tribunal.  If the case actually goes to hearing they will have to pay an additional £950 hearing fee.  It is proposed that people on a low income will pay reduced fees although full detail is not presently available.

In addition a new limit on an award of compensation for unfair dismissal is going to be set at the lower of the employee’s annual salary or £72,300.  Therefore the maximum an employee earning £14,000 a year would receive would be £14,000.  This change addresses the notion that some employees have that because the compensation has a cap of £72,300 that is what they are going to achieve.  It also gives employers certainty of how much compensation could be awarded against them if they lose.

Employment tribunal claims have reduced in the last year and when these changes are implemented it is envisaged that the number of claims will reduce even more.

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