Chancellor Announces Employment Law Reforms

In his speech yesterday at the Conservative Party conference, Chancellor George Osborne has announced two important changes to employment law intended to reduce the number of employment tribunal claims and boost the economy.

From 1st April 2012, the qualifying period for individuals to bring a claim for unfair dismissal will be increased from one year to two years employment.

Secondly, fees will be introduced for the first time for tribunal claims.

Mr Osborne said fees would be introduced as “we respect the right of those who spent their whole lives building up a business, not to see that achievement destroyed by a vexatious appeal to an employment tribunal. So we are now going to make it much less risky for businesses to hire people.”

A consultation will begin at the end of November to determine the amount to be charged and how it should be paid. However, from the limited information currently available, it appears the following fee structure may be introduced:

  • upfront fee of £250 when lodging a claim;
  • further fee of £1,000 payable by Claimant when the hearing is listed;
  • higher fees if the claim is for over £30,000;
  • fee to be refunded if Claimant wins, and forfeited if they lose, and
  • fees to be waived for those with no money

The test for a fee-waiver is likely to be simply that a person is receiving income support. If so, most ex-employees will automatically qualify for the waiver.