Law Commission unveils employment tribunal reform package

Paines: System is not working as well as it should

Doubling the time limit for launching claims to six months and allowing workers to bring breach of contract claims while still employed are among Law Commission recommendations for employment tribunal (ET) reform.

A review of the ET jurisdiction found a range of issues, including unsatisfactory gaps in ETs’ powers which can mean claimants have also to bring proceedings in the county court because the tribunal cannot deal with certain breach of contract claims.

The Law Commission said it was persuaded by responses to its consultation, which closed in January 2019, that bringing a claim within three months, as is currently the case for most ET claims, may be difficult for a significant number of claimants.

“This is particularly the case where there is a wish to pursue internal grievance procedures, and a need to obtain legal advice and representation.

“We also agree with arguments that increasing the time limit too much would be to the detriment of employers.”

The three-month limit dated back to the original conception of tribunals as a speedy and informal forum, but the commission said claims today “take longer to be resolved and are often more complex and may involve large sums”.

The final report also to change the test for extending time limits – currently that it was “not reasonably practicable” to bring the complaint in time – to where the ET considers it “just and equitable” to do so.

On allowing claims where the worker was still employed, the commission said it was “anomalous” that ETs have wide-ranging jurisdiction over matters such as deductions from wages arising during employment and contractual claims arising during employment where the claim is outstanding upon termination, yet lack jurisdiction over other contractual claims.

Similarly, ETs should be allowed to hear contractual claims where liability arose after employment has ended, with the six-month time limit running from the date on which liability fell due, it recommended.

Other recommendations included:

  • Increasing ETs’ power to award damages in breach of contract claims from £25,000 to £100,000, which “should reduce the need to pursue claims in two different courts”;
  • Allowing ETs to interpret or construe contractual terms and conditions contained or referred to in a statement of particulars;
  • Allowing tribunals to hear complaints by employees that they are working hours in excess of the maximum working time limits;
  • Giving ETs the power under section 14 of the Employment Rights Act 1996 to determine whether the employer deducted the correct amount of money from the employee’s wages;
  • Improving the procedures for enforcing awards to ensure employees receive the compensation in a timely fashion;
  • Establishing an employment and equalities list in the High Court with non-exclusive but unlimited jurisdiction in employment and discrimination cases, including claims of discrimination in the supply of goods and services; and
  • Deploying employment judges with experience of hearing discrimination claims to the county court to hear discrimination cases outside the employment field.

The Law Commission rejected other ideas, such as allowing employers to bring claims in the ET: “The issues raised by such claims are generally outside the expertise of employment tribunals.”

Law Commissioner Nicholas Paines QC said the ET system was not working as well as it should.

“The reforms that we have recommended will bring real benefits for the courts and tribunals system and its users. The adjustments will improve employment tribunals’ ability to resolve employment disputes as effectively and justly as possible in one place.”

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