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Out with the old and in with the new…

…Tribunal Rules, Settlement Agreements, New Forms ET1 and ET3 and Tribunal Fees

The Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (the Rules) are now in force. Here is a summary of the main changes.

Presenting a claim

The Tribunal can reject a claim if it does not include certain required information, if it is not accompanied by the prescribed fee or, if it is “in a form which cannot sensibly be responded to” (Rules 10-12).

This is likely to have a larger impact on unrepresented Claimants with poor language skills who have inadequately drafted their claim form or whose details of claim are illegible.

If a claim is rejected in this manner a Claimant may apply for a “reconsideration” under Rule 13. The application to reconsider the claim can be determined without a hearing or at a hearing to be attended only by the Claimant (Rule 13(3)).

The Respondent will not be served with a claim until it has been accepted by the Tribunal so in practice claims which are not resubmitted by the potential Claimant for reconsideration may never come to the Respondent’s attention.

Relationship with Tribunal fees

Rule 11(1) provides that a Tribunal shall reject a claim if it is not accompanied by the correct Tribunal fee or remission application.

However Rule 11(2) provides that if a claim is lodged with the incorrect fee (which is lower than the amount due) then a notice will be sent to the Claimant specifying a date for payment of the additional amount due; and confirming that the claim will be rejected if the outstanding amount is not paid by the date specified.

It is not clear from the Rules whether the limitation period will be extended by the Tribunal in circumstances where the fee is not paid or not paid correctly however we understand from the Ministry of Justice that time limits for bringing claims will not be extended to provide Claimants with further time to find the money to pay the fee or to make a fee remission application

Sift stage

When a claim has been accepted an Employment Judge will consider all of the documents it has and decide whether the Claim or Response, or any part of it, should be dismissed, either because there are no arguable complaints/defences or for lack of jurisdiction (Rules 26 – 28).

The Respondent will still be required to submit a Response and it may be that the sift stage identifies that the Response has no prospect of success.

The Employment Judge carrying out the sift may also decide what case management orders are required to get the case ready for a hearing, decide that a preliminary hearing should be listed or propose judicial mediation at that stage.

The sift stage is a welcome change and is likely to mean that weak claims are identified and dealt with more quickly. It may also mean that the parties will assess the merits of their cases at an earlier stage and may encourage early settlement negotiations.

It will be more important than ever that the parties ensure that their cases are comprehensively drafted and presented in the best light on paper given the upfront and direct involvement of the Employment Judge at an early stage.

Response forms – late submissions and applications to extend time

Rule 18 provides that where a Respondent submits a response form outside the normal time limit, it shall not be automatically rejected by the Tribunal provided that an application for an extension of time has already been made (under Rule 20) or the response includes or is accompanied by such an application.

If a late response is rejected, a notice will be issued to the Respondent explaining how to apply for an extension of time and how to apply for a reconsideration of the decision.

Rule 20 covers how to apply to extend time for presenting a response. The new rule favours Respondents and is more flexible than the previous regime, in that it allows such applications to be made before or after the original 28 day deadline to present a response has expired. Further, Respondents do not need to explain why they cannot comply with the original time limit – instead they need to set out the reasons why the extension is sought (and, if the time limit has expired, attach a copy of the draft response or explain why that is not possible).

Preliminary hearings

Case Management Discussions and Pre-Hearing Reviews have been replaced with a combined hearing known as “Preliminary Hearings” at which both case management and substantive preliminary issues may be decided (Rules 53-56).

The parties will need to be prepared to deal with technical and jurisdictional issues at these hearings in addition to the more run of the mill case management and listing considerations. This may mean that Preliminary Hearings take longer but may ultimately reduce parties’ costs and lead to more efficient case management and narrowing of issues at an early stage. Indeed Rule 48 provides that Preliminary Hearings can be converted into “final hearings” if neither party is prejudiced by doing this.

Applications

The procedure for making an application is relaxed. There is no longer a requirement to explain how granting the order sought will assist the Tribunal in dealing with the case efficiently and fairly.

Additionally, the previous requirements to copy an application to opponents are slightly amended. Now all the applicant needs to do is to provide their opponent with a copy of the application and inform them that if they wish to object to it, then they should write to the Tribunal as soon as possible (Rules 29-30).

Withdrawal and dismissal of claims

Where a claim or part of it has been withdrawn, the Tribunal will automatically issue a judgment formally dismissing the claim (Rule 52), unless at the time of withdrawing the claim, the Claimant specifically expressed a wish to reserve the right to bring a further claim against the Respondent and they have a legitimate reason for doing so, which is likely to be rare.

Therefore employers no longer have to apply for dismissal of proceedings. However, as there is no timeframe stated in the rules for Tribunals to dismiss proceedings, parties may end up chasing the Tribunal and this is likely to be the Respondent.

Reconsideration of decisions

Decisions of the Tribunal can be “reconsidered“, either on the Tribunal’s own initiative or on the application of a party. A party must apply for a reconsideration in writing within 14 days of the date the original decision was sent out to the parties, explaining why the decision was wrong. This new type of application will be similar in nature to the current “review” process.

Costs assessment

The rules on costs are set out at Rules 74 – 84. Of note is Rule 78(1)(b) which provides employment judges with the power to carry out a detailed assessment of costs in excess of £20,000 (the current cap on costs awards that can be made by the Tribunal).

Settlement agreements

Employers and employees are now able to keep confidential certain negotiations which they have between them regarding termination of the employee’s employment. This means that an offer of settlement and any negotiations cannot be used as evidence in any subsequent unfair dismissal claim.

Previously where there was an existing employment dispute, an employer and employee could enter into discussions regarding settlement of that dispute on a “without prejudice” basis. This meant that any statements made in a without prejudice discussion, which were made in a genuine attempt to resolve an existing dispute, could not be put before a court or Tribunal as evidence.

However the “without prejudice” rule only applied where there was an existing dispute. In practice, many employers still made settlement offers prior to termination of employment under the guise of the “without prejudice” rule where no dispute existed. In most cases, the discussions were successful and Tribunal proceedings were avoided. As such there used to be a risk that the “without prejudice” cloak could be challenged and the settlement offer could be produced by the employee in evidence in a subsequent claim. This has now gone and the new confidentiality rule is welcomed. It is designed to give employers more freedom to make settlement offers in this situation without fear that their offer would be admissible in any future proceedings.

Please note that these new provisions only apply to discussions and negotiations in relation to matters that could otherwise give rise to a claim for ordinary unfair dismissal. If the departing employee has claims for discrimination or whistleblowing these will not be protected and employers will still need to rely on the previous “without prejudice rule” in these types of exit discussions. Care should also be taken in using settlement discussions to exit employees for sickness absence or poor attendance where the absence or attendance issue could be caused by, or related to, a disability.

New Tribunal Forms

From now on the new forms ET1 and ET3 should be used. Claims or responses issued on the old forms after 29 July 2013 will be rejected.

Tribunal fees

Tribunal fees to issue a claim and for the hearing are now in force and will be implemented in the Employment Tribunal (ET) and Employment Appeal Tribunal (EAT) for all claims issued after 29 July 2013.

Fees for Claimants

There are two levels of fees depending on the complexity of the claim.

Level 1 claims (such as unfair deduction from wages and redundancy pay)

  • Issue fee: £160
  • Hearing fee: £230

Level 2 claims (such as unfair dismissal, TUPE claims, equal pay or discrimination claims)

  • Issue fee: £250
  • Hearing fee: £950

For further information, please see our update “Tribunal fees”.

For further information or to discuss any questions or issues arising from these changes please do not hesitate to contact us.