Employment Law | Employment Law Changes

Employment law is in the news this month, as a number of changes come into effect on July 29, all of which are to do with the termination of employment or ensuing tribunals.

Firstly, compromise agreements will be renamed settlement agreements, which are made when an employment comes to an end and the employee has claims against the employer, such as not having been paid in full, or if he or she believes there to have been unlawful discrimination.

These matters are often dealt with by a single agreement and, if the employee is happy to sign it, they cannot later pursue the employer through tribunals or the courts.

The main difference between a settlement agreement and a compromise agreement is the introduction of confidential pre-termination negotiations, which will be inadmissible in any ordinary unfair dismissal proceedings, as long as there has been no “improper behaviour” by either party. This goes further than the “without prejudice” principle, as it will apply even where no formal dispute has yet arisen.

However, if an employee wishes to pursue a claim against their employer via an employment tribunal, from next week they will have to pay a fee. For less complex cases, referred to as level 1 claims, the fee to issue a claim will be £160 and the hearing fee £230.

For more complex cases, called level 2 claims, the issue fee will be £250 and the hearing fee £950. Level 1 claims are likely to include issues such as unpaid wages due, while level 2 claims could include unfair dismissal or discrimination claims.

Other tribunal rules coming into force on the day include combining pre-hearing reviews and case management discussions into a preliminary hearing and revised powers for judges to strike out weak cases.

In addition, there will be an individual cap of 12 months’ pay in relation to the compensatory award for unfair dismissal. This will apply where the amount is less than the overall cap, which is currently £74,200.

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Mackrell Turner Garrett Solicitors in London