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How will the changes to Employment Law benefit you as an Employer?

From 29th July 2013 significant changes to employment law will benefit employers by reducing the number of unmeritorious claims in the Employment Tribunals. Until now there has been no disincentive to the bringing of such claims and indeed many were settled by employers simply to avoid the costs and inconvenience in opposing them.

Fees will be payable by a claimant before they can bring a claim in the Tribunal. The amount of the fee varies according to the type of claim being made. Simple claims such as unlawful deduction from wages will require a fee of £160 on issuing the claim and a further hearing fee of £230 when the matter is set down for hearing. For complicated claims such as unfair dismissal and discrimination an initial fee of £250 will be payable with a hearing fee of £950.

Given the relatively low value of most claims in the Employment Tribunal it is hoped that these not insubstantial fees will have the effect of deterring undeserving claims.

In addition, from the same date a new statutory cap to the amount of compensatory award has been introduced. The maximum compensatory award is now the lower of £74,200 or 52 weeks pay. This is 52 times one week’s actual gross pay for the employee at the time of dismissal.

In most cases, therefore, the maximum amount that an employee can be awarded for unfair dismissal has been substantially reduced.

It will be easier for employers to conduct pre-termination negotiations with their employees without the fear of a constructive dismissal claim being brought. If an offer to negotiate a settlement has been made before dismissal, this will be inadmissible in any subsequent unfair dismissal proceedings; unless there has been improper behaviour.

There are many other significant changes which have either been made or will be made shortly, however it is to be hoped that those mentioned above will make life easier for employers going forward.

If you would like to know how any of the changes mentioned above or any other recent changes to employment law affect your business please contact a member of our Employment Team on 01905 721600

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