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Employment law reform

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Do you know what is expected of your business?

Running a small business can be busy at the best of times and often you don’t have a dedicated HR employee to keep up with legislation. However, with the recent employment law reforms, it’s important that you understand exactly how your business might be affected. Here’s our quick guide to the latest reforms and how they could impact on you.

Employment tribunal claimant fees

There are plenty of genuine claims made to employment tribunals, but there are also those that are simply out to see what they can gain. In order to help prevent this, claimants will now need to pay a fee when they submit their claim. If the correct amount is not included with the submission, then the claim will be instantly rejected. There will also be an additional charge once the case reaches the hearing stage.

The amounts will vary depending on the nature of the claim. For a level one claim, there will be an initial fee of £160 and then a further £230 charge to proceed to a hearing. This will cover claims including redundancy payments, holiday pay and unlawful deductions from wages. More serious cases, for example discrimination, unfair dismissal and equal pay, are classed as level two. These will incur a submission charge of £250 and £950 at the hearing stage.

Employment tribunal rules

There have been a number of changes to how employment tribunals are organised,shutterstock_103681262 which it’s hoped will make the process simpler and easier to understand. There will be an initial hearing for both parties to state their case in front of a judge. At this point, they will both be encouraged to rectify the situation another way and eliminate the need for a hearing. The judge will also be able to reject the claim if they believe there’s little chance of the claimant winning.

Compensation limits

There will now be a limit on the amount of compensation claimants can receive in an unfair dismissal case. This will be the equivalent of 52 weeks wages or £74,200, whichever is the lowest amount.

Compromise agreements

These are now called settlement agreements and there will also be a new code of practice to accompany the change. Under the terms of this agreement, a company is allowed to suggest that the employee should leave the business in return for a specified financial settlement and without the need for a tribunal hearing.

Pre-termination negotiations

The rules surrounding the negotiations prior to a settlement agreement are now much stricter. Any discussions between the employer and the employee will now remain confidential in unfair dismissal cases. Previously they could be used by the employee as evidence within a hearing.

These changes to employment law have generally been made in favour of the business. However, there are still major issues for companies who face employment tribunals and it’s always best to try and resolve issues before they become that serious. In the past year alone, one in five businesses will have had to deal with a tribunal claim, so it’s not an issue that you can take lightly.




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About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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