New employment tribunal rules come into force

New rules aimed at reducing the number of employment tribunals have come into force and could see employers facing fines of up to £5,000.

Changes to the law, which came into effect at the start of the 2014/15 tax year, will also see employees having to notify conciliation service, Acas, before they will be given access to a tribunal.

The changes are aimed at helping reduce the number of employment tribunals, which is good news for businesses as it should further prevent weak claims and the associated pressure and cost.

However, for the first time employment tribunals can now impose fines against employers.

Four key things businesses need to know:

1.    Staff wanting to bring a case of unfair dismissal or discrimination must first notify Acas to see if the dispute can be resolved.

2.    Employers can be ordered to pay a fine of between £100 and £5,000 if they lose a case brought by a current or former employee, and the business is shown to have especially poor workplace practices.

3.    The fines are in addition to any back-pay that is due to the employee or any compensation that might be ordered by the tribunal.

4.    In cases where a claimant has brought multiple claims arising out of the same act, only a single penalty will be applied.

The Harrison Drury message to businesses remains the same: It is critical for businesses to seek early professional advice on staffing procedures and internal documentation, such as contracts of employment and staff handbooks.

According to ministers, the changes will help avoid “stress, time delays and excessive costs” and the fines will create an incentive for bosses to respect the rights of their staff rather than risk increased financial penalties.

However, if tribunal litigation cannot be avoided, having the proper procedures in place right from the outset can reduce the risk of employers and businesses of being hit by hefty fines. It is also another factor that businesses should consider when deciding whether to fight or settle employment tribunal claims.

If you would like a review of your employment procedures please contact the Employment team on 01772 258321.