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Following the consultation launched by the government earlier this year, Chancellor George Osborne announced two important changes at the Conservative Party conference last week. The aim of the proposals is to reduce the number of employment tribunal claims and boost the economy, providing some good news for employers.

First, the qualifying period for unfair dismissal will be increased from one year to two years with effect from 6th April 2012. The press release that accompanied this announcement set out the government’s estimate that this will save businesses £6 million per year, with a reduction in 2,000 claims per year.

Second, there has been mention that fees will be introduced for Claimant’s wishing to bring tribunal claims. Although there was no official announcement as to the detail of the tribunal fees proposal, the BBC has reported that further consultation will commence in November 2011 with implementation scheduled for April 2013. Current reports suggest that the following fee structure might apply::

  • An upfront fee of £250 when lodging 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 lost (althugh it is not clear whether this means that the employer would be ordered to pay or the tribunal woudl refund it);
  • Exemptions for those without the means to pay

Although the changes do appear to provide some positive news for employers, one concern is whether the fee rules will actually have any teeth to them. If the test applied to determine whether a Claimant has the means to pay the fee is based on eligibility for income support then most unfair dismissal claimants will automatically qualify for the waiver by virtue of being out of work.

As always we will keep you posted with any further developments, so watch this space….

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