On the 6th April 2014, further new measures were introduced by the Government in an endeavour to reduce the demands on the Employment Tribunal Service.

Guest author: Dr Yvonne Foster, Director of Lotus Human Resource

The tribunal service costs £74 million per annum to run, and the Government believes it is reasonable to expect users to contribute to its running costs.

The introduction of employment tribunal fees in 2013 has had the desired effect of reducing the number of claims lodged.  In 2013, claims registered declined by 79% compared with 2012. 

Two further significant changes came into effect on the 6th May 2014. 

  • Notify ACAS of claim

It is now a mandatory requirement for employees to notify ACAS of their intention to lodge a claim.   ACAS will then invite the parties to enter into ‘Early Conciliation’ in an attempt to settle the dispute.  No prospective claimant can enter a claim without first obtaining a ‘Conciliation Certificate’ from ACAS.

  • Financial penalties for employers

The second major change is that financial penalties have been introduced for employers who lose a tribunal case, where the case has ‘aggravating features’ or behaviours which show a clear disregard for the rights of an employee.

Financial penalties for employers

From the 6th April 2014 Employment Tribunals will be able to award penalty fines on employers who lose their case; where it is deemed that a worker’s right has been breached and the employer has engaged in ‘aggravating behaviours’.  Penalties range from £100-£5,000 and are payable to the Government.

When assessing fines the tribunal judge will use their discretion, taking into account factors such as:

  • The size of the employer
  • Whether there is a dedicated HR team
  • The extent of any ‘aggravating’ features

The fine is halved, if paid no later than 21 days after the written notice.

How early conciliation works

Once the claimant has notified ACAS, a conciliator is assigned to the case and they make contact with the employer. Both parties are encouraged to participate in the process in an attempt to reach a settlement.  However, either can voluntarily stop the process at any time.

Once the employee gives their consent for the employer to be contacted, the conciliator will do this; if the employer does not respond or does not wish to engage, the case is closed and the early conciliation certificate will be issued; this gives the green light to proceed with a claim.

If an agreement is reached it is legally binding.

ACAS has one month (this can be extended by a further two weeks) to work with both parties to resolve/ reach an agreement.  The timescale for lodging a claim is not affected, as the clock stops on the time limit for bringing a claim during the Early Conciliation process.

Once the parties agree to participate, ACAS will assist specifically to:

  • Explain the process, the strengths and weakness of the case, and options open to the parties
  • Explore how the case could be resolved without going to tribunal
  • Proposals for settlement

An employer can also initiate a discussion with ACAS, where they believe a dispute is likely to lead to tribunal proceedings.  However, once the employee notifies ACAS of their intention to proceed with a claim, if neither party wishes to conciliate the matter ends there, with the issue of the Conciliation Certificate.

Benefits of early conciliation

ACAS reports that Early Conciliation is a positive way to resolve disputes early, thereby minimising the time, stress and financial risks involved in tribunal claims.  Based on their success of resolving approximately 75% of claims, ACAS believes this approach will be successful in the majority of cases. 

Key features are:

  • Early conciliation is entirely free to the employee and the employer
  • It can provide a quick solution to many workplace disputes
  • The terms of the settlement can include features such as references (not available through the tribunal)
  • Where early conciliation does not work and a claim is lodged, ACAS will continue to offer conciliation support to both parties in the dispute, up to the date of the hearing.

Exceptions to the requirement to notify ACAS

There are a limited number of exceptions to the mandatory requirement to notify ACAS which are:

  • Where the claim involves several employees from the same employer, and one claimant has already notified ACAS in the same dispute, the other claimants do not have to
  • Where the employer has already made its own notification about the dispute to ACAS, using the early conciliation process
  • Where the employee is claiming reinstatement, pending the hearing of his or her claim (possible only in rare cases)
  • Claims against various national security agencies
  • Claims against the National Insurance Fund, where an employer is insolvent
  • Claims brought by one organisation against another

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