Top 5 employment law issues for 2013

by Laurie Anstis on January 2, 2013

Following on from my posts in 2012 and 2011, here’s what I think will be the most significant issues in employment law in 2013:

1. Employment tribunal fees

For the first time in their history, employment tribunals are due to charge fees from this summer. Fees will range between £160 and £1,200.

The counterbalance to fees will be a power for employment tribunals to impose financial penalties of up to £5,000 (reduced for early payment) on employers who are found to have breached employee’s rights, and where there are “one or more aggravating features” (clause 14 of the Employment and Regulatory Reform Bill).

These changes are bound to have an effect on the behaviour of employers and employees, particularly in any attempts to negotiate settlements prior to a tribunal claim being submitted. Compulsory ACAS pre-claim concilation (clause 7) is on the cards, but employers may be tempted to resist concilation to test whether the employee is actually willing to put money into paying the tribunal fee. From the employee side, employees may try to put pressure on employers to settle before a hearing and avoid the risk of a financial penalty being imposed by a tribunal.

There are going to be many implications of these changes that will need to be worked through over the coming year. One side effect may be the shifting of some unpaid wages claims into the small claims court (where the fee may well be smaller), and away from the employment tribunal.

2. Unfair dismissal changes

On 1 February 2013 the upper limit on the compensatory award for unfair dismissal will increase to £74,200.

Although no plans have been announced to change this limit, the Enterprise and Regulatory Reform Bill (clause 13) contains a power to vary the amount of the compensatory award, including a power to reduce it to the lower of one year’s median earnings (approximately £28,000) or one year’s actual earnings for the employee in question.

Last year the qualifying period necessary to claim unfair dismissal was increased from one year to two years for all employees employed on or after 6 April 2012. So far, this change has had no practical effect, since until April 2013 employees employed on or after 6 April 2012 wouldn’t have a year’s service and wouldn’t have been able to claim unfair dismissal even under the old rules. As from 5 April 2013 this will have a practical effect, and employees who would have gained the right to claim unfair dismissal under the old rules will have to wait an extra year before that have that right.

Any tightening of the qualifying period or compensation limits for unfair dismissal runs the risk that aggrieved employees will try instead to bring their their claims within the (typically more contenious) discrimination law regime, or special categories of unfair dismissal in which there is no period of qualifying service or upper limit on compensation, such as whistleblowing claims. It will be interesting to see if any decrease in unfair dismissal claims is accompanied by a rise in discrimination claims.

3. New rules

New employment tribunal rules are due to come into force in April 2013.

The changes are avowedly evolutionary rather than revolutionary. The most promient change is the introduction of a preliminary process for striking out all or part of a claim or response. It remains to be seen whether this will have any effect on the strong line taken by the appeal courts against over-use of a power to strike out claims or responses.

4. Religious discrimination

During 2013 we can expect the European Court of Human Rights to rule on the cases of Eweida/Chaplin and Ladele/McFarlene, concerning (respectively) religious symbols and uniform policy, and conflicts between matters of religious conscience and discrimination law.

If the case is decided against Eweida and Chaplin, the government has committed to legislate to permit the earing of religious symbols in the workplace. Expect to hear more on this difficult topic during 2013.

5. Age discrimination and retirement

Age discrimination and compulsory retirement were top of my employment law issues for both 2012 and 2011. Despite the most recent quarterly statistics showing a fall of 23% in the number of age discrimination claims submitted, I think we will see more issues arising around age discrimination, and compulsory retirement in particular. I do not think it will be long before we have a case as prominent as Miriam O’Reilly’s in the field of compulsory retirement (or attempted compulsory retirement).