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The government has introduced a number of changes to employment law with the aim of making it easier and cheaper for employers to hire and fire employees. The latest step is the introduction of new rules of procedure for Employment Tribunals under the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013, which came into force on 29 July 2013.  This article looks at the changes to Employment Tribunal procedure and considers how these may affect employers, particularly when considering the costs of potential claims. The changes in the new regulations are likely to lead to a reduction in the number of cases issued.

Employment Tribunal fees

For the first time there will now be fees for claimants wishing to issue Employment Tribunal claims. Claimants will also have to pay a fee of up to £950 when the claim is listed for a hearing. This is likely to deter a number of claimants from issuing or continuing with claims. Fees will be waived for claimants who meet certain criteria, providing they make an application for remission.

Claims will be rejected if the appropriate fee is not paid or an application for remission is not made when the claim is presented to the Employment Tribunal.

Dismissing claims at initial stage

Employment judges will now be able to consider whether a claim has so little prospect of success that it should be dismissed at an early stage without a hearing or for instance, the respondent having to apply for a Pre-Hearing Review. If the employment judge considers that the tribunal has no jurisdiction to hear a claim or that it cannot be sensibly responded to, they will return it to the claimant with a notice of rejection. This is likely to weed out the weak claims, which previously respondents would have had to respond to and apply to be struck out. Now, Employment Tribunals will be able to pick out those claims that should not have been issued and dispose of them with minimal time and expense being spent by the respondent.

Employment Tribunal process: simplified

The new regulations also appear to focus on making the Employment Tribunal process less rigid and complex. There is now a requirement to ensure that cases are dealt with “avoiding unnecessary formality and seeking flexibility in proceedings.” This should lead to a reduction in costs when dealing with claims. Tribunals are likely to take a more pragmatic approach to the management of proceedings.

Default judgment

A prime example is the change to the rules of procedure for presenting ET3 response forms outside the normal time limit. A respondent can now apply for more time to submit the response if the 28-day time limit has expired. Previously, once the time limit had expired, the Employment Tribunal would generally issue a default judgment and there would usually need to be a hearing to review the default judgment. In the vast majority of cases, the judgment would be set aside and the response allowed but extra costs would be incurred by the respondent.

Notwithstanding this change, we would always advise a respondent to seek legal advice and present a response before the 28-day time limit has expired.

Preliminary Hearing

We consider that the new rules of procedure are likely to lead to a shorter lifecycle for cases. Cases are likely to be disposed of earlier than before, again reducing the time and costs that are spent on them.

There is now no longer a distinction between Case Management Discussions and Pre-Hearing Reviews. Both will now be replaced by a single Preliminary Hearing. This will deal with case management and procedural issues, as well as jurisdictional issues. If both can be dealt with at an early stage, this will shorten the time from the start of the claim to the hearing, which is likely to lead to a reduction in costs.

The Employment Tribunal also has the power to strike out cases at the Preliminary Hearing or convert it to a final hearing if appropriate. This might happen if the claimant’s main claims are struck out and they are left with a minor claim, such as a claim for wages.  This would avoid the time and cost of relisting that claim for a separate hearing.

Although cases are likely to be disposed of earlier, there is a strong possibility that it will take longer for respondents to be informed of claims being pursued, given that the claims will have to go through the sifting process and potentially consideration of an application for fee remission before the Claim Form is sent to the respondent. Respondents are therefore going to wait longer after the limitation date before being able to breathe a sigh of relief that no claim has been issued.

Judicial mediation

While all of the above sounds like good news for respondents, we would not advise celebration just yet: there is some bad news. The new fees do not just apply to claimants when they are issuing claims and when the case is being listed for a hearing. They must also be paid whenever a party makes an application, for instance, to change the hearing date if a witness cannot attend. Furthermore, when requesting judicial mediation, the fee (£600) is always payable by the respondent.

Also, if a claimant is successful with his or her claim, the Employment Tribunal has the power to order that the issue fee and hearing listing fee should be reimbursed by the respondent.

Finally, the time limit for when judgments need to be paid before interest starts to accrue has been shortened from 42 days down to just 14 days.

Judicial review

All things considered, the new changes do seem positive for employers. However, it remains to be seen how they will work in practice, whether they will have the predicted effect on claims and whether further changes will be made. The introduction of fees, for example, faces judicial review in England and Scotland.

For more information about Employment Tribunal rules of procedure or to discuss any of the other issues in this article, please contact our Employment Law team or call us on 0117 904 6000.