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Employment Law for Employees Law Football: Understanding the Enterprise Regulatory Reform Act 2013 (ERRA)

Recently, employment law has been developing at a breathless speed. This can be seen in the Enterprise Regulatory Reform Act 2013 (ERRA). The idea behind this Act is to try and reduce the number of Employment Claims that end up at Employment Tribunal, thereby decreasing the burden on Employers and the cost to Government.

Throughout its relatively short history, Employment Law has been a bit like a football match between the Right and the Left Wings of Government. When a Labour Government is in power, the rights afforded to the Employee tend to be greater. When the Conservatives are in control then the advantage swings back to the Employer. We have already seen an example of this, as the period of service required to issue an Unfair Dismissal Claim was increased from 1 to 2 years.

The key changes in the new regime are firstly that Employers are to be given the opportunity for what are known as Protected Conversations, secondly the re-naming of Compromise Agreements to Settlement Agreements and thirdly the introduction of fees when issuing an Employment Tribunal Claim.

CONFIDENTIAL PRE TERMINATION NEGOTIATIONS OR PROTECTED CONVERSATIONS

It will come as a relief to many Employers that certain discussions prior to the termination of an Employee's employment will now be considered confidential in relation to an Unfair Dismissal Claim.

Every Employer knows that they face a difficult position in dealing with this. You have an Employee to whom you wish to offer a Compromise Agreement. In doing this you will have to discuss issues surrounding their Employment. There is the possibility that they will walk out and bring a Constructive Dismissal Claim on the grounds of what you had said or use what you have said at the Employment Tribunal. Under Section 14 of the ERRA, such conversations will now be without prejudice and cannot be held as part of any Employment Tribunal claim for unfair dismissal. This means that any pre termination discussions you have with the Employee regarding their Employment will not be able to be used in Employment Tribunal proceedings for Unfair dismissal. They will however probably be admissible in a complaint about unlawful discrimination, so if your comments and discussions are alleged to be discriminatory then protection will be lost.

This will hopefully mean that there will no longer be a need to issue formal disciplinary proceedings against an Employee whilst simultaneously offering them a Compromise Agreement. This may save time, money and stress to HR professionals, business owners and dare we say it, employees too.

CHANGE OF NAME TO SETTLEMENT AGREEMENTS

For many years Compromise Agreements have been used not only to compromise a claim between an Employer and Employee, but also to provide a form of insurance to the Employer that when they dismiss an Employee there is no possibility that they will be able to issue proceedings against them at a later date. This document is now to be referred to as a Settlement Agreement. This reflects the fact that the Agreement does not mean either party has had to "compromise" their position, but rather that they have reached a settlement between them. Currently the general rules surrounding these remain the same. New rules are in place about the period of time over which Settlement agreements can be considered by an employee and negotiated.

EMPLOYMENT TRIBUNAL FEES

Possibly the most eye-catching reform is the introduction of fees when issuing a claim at the Employment Tribunal.. The level of fee a Claimant will have to pay depends on which claim they are bringing. These are described as Type A and Type B Claims. Whilst this will be welcomed by Employers (as it may make an Employee think twice before issuing the claim) it will be a burden on an Employee, who perhaps has no income, and who may thus find it hard to scrape together the funds required if fee exemption is not available to them.

Examples of a Type A claim are claims for statutory redundancy payments, equal pay, unlawful deductions from wages and breach of contract.

Examples of a Type B claim are claims for unfair dismissal, discrimination and whilstleblowing.

There are two fees to pay, namely an issue fee and a hearing fee. For a Type A claim the issue fee is £160 and for Type B £250. The hearing fee for a Type A claim is £230 and for a Type B claim £950.

There will be fee exemptions to allow those on benefits and on a low income to access the Tribunal without having to pay the fees. However, an employee who has some savings may not be eligible for the exemptions.

MEDIATION

In addition should the Claimant decide to use Judicial Mediation, the Respondent to any Employment Tribunal proceedings will have to pay £600. As the success of judicial mediation has been limited, an Employer may well be unwilling to pay a further £600 fee that it is unlikely he will be able to recover from the Employee, even if the Employer is successful.

Further, there are a number of other fees now payable for individual applications and filing an appeal at the employment appeal tribunal.

CONCLUSION

The football match that is Employment Law never stays the same, and the rules have changed yet again. Whether this achieves the desired effect the current Government wants in decreasing the number of Employment claims remains to be seen. What is certain is that the introduction of fees will make any potential Applicant consider their position carefully before issuing a claim

Wards Solicitors are available and able to provide a wide range of advice to all Employers and Employees. We are able to tailor our services to fit both your needs and your budget. Please feel free to contact Alex Lyttle on 0117 9434 816 oralex.lyttle@wards.uk.com to discuss matters further.

The table below lists the relevant sections of the Act and provides a brief description of the relevant provision and when they will come into force.

Section Development Comes into force
7 and 8 Claimants to contact ACAS before submitting tribunal claim. 6 April 2014
9 Power for Government to add to list of claims in which ACAS can conciliate 6 April 2014
10 New duty on ACAS officers in relation to non-disclosure 25 April 2013
11 Power to allow Tribunal legal officers to decide certain matters instead of judges On Hold
12 EAT judges to hear appeals alone unless a full panel is ordered. 25 June 2013
13 No qualifying period for dismissal based on political opinion or affiliation. 25 June 2013
14 Offers or negotiations regarding termination on agreed terms not to be admissible in unfair dismissal claims unless there is improper behaviour. 29 July 2013
15 Power for Government to reduce or increase statutory cap on compensatory award, and consequential amendments to section 34 of the Employment Relations Act 1999. 29 July 2013 (amendment to ERA 1999)
16 Tribunals to have the power to fine an employer up to £5,000 (payable to the Government) if they lose and their case has "aggravating features". To be decided
17 Qualifying disclosure only if worker reasonably believes disclosure is in the public interest (Does not apply to disclosure before 25 June 2013). 25 June 2013
18 Removal of "good faith" requirement for a protected disclosure, but provision for reduced compensation if disclosure not made in good faith. 25 June 2013
19 Employees and agents to be personally liable for detriment against whistleblowers. Employers and principals to be vicariously liable. 25 June 2013
20 Inclusion of various NHS contractors in whistleblowing legislation. Power for Government to add new categories of worker 25 June 2013
21 Enables regulations to be made giving tribunals the power to make a deposit order in respect of a specific part of a claim or response only; and to make an order for payment of witness expenses where it has also made a preparation time order. 25 June 2013
22 Changes the way in which increases to the limit of a week's pay and other tribunal awards are calculated, and the date on which increases happen. 25 June 2013
23 Compromise agreements to be renamed "settlement agreements". 29 July 2013
24 Sets out transitional provisions for sections 10 (ACAS non-disclosure duties), 12 (EAT composition), 13 (dismissal for political opinions), 14 (pre-termination negotiations), 16 (financial penalties), 17, 18, 19 and 20 (whistleblowing). 25 April 2013
PART 5: REDUCTION OF LEGISLATIVE BURDENS
59 Government to have the power to include sunset and review clauses in secondary legislation. 25 April 2013
64 Curbing the EHRC's powers and duties 25 June 2013
65 Repealing third-party harassment provisions in section 40(2)-(4) of the Equality Act 2010 October 2013
66 Abolishing statutory discrimination questionnaires by repealing section 138 of the EQA 2010. 6 April 2014
69 Changing the liability for breaches of health and safety duties. 1 October 2013
72 Abolition of Agricultural Wages Board (AWB) and enabling agricultural workers to be brought within existing working time and national minimum wage laws. 25 June and October 2013
FURTHER MISCELLANEOUS PROVISIONS
79,80,81 and 82 Provisions on enhanced shareholder voting rights and directors' remuneration for quoted companies 1 October 2013
97 Government must make an order providing that caste is an aspect of race for discrimination purposes. 25 June 2013
98 Amends the Equality Act 2010 to allow regulations to be made to require Employment Tribunals to order an employer who loses an equal pay case to carry out an equal pay audit. 25 April 2013
103 Sets out the sections that came into force on Royal Assent and other sections which come into force two months later. Remainder are subject to order. 25 April 2013