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44% Jump in unfair dismissal claims before new government measures kick in

44% Jump in unfair dismissal claims before new government measures kick in

Incoming Government restrictions to unfair dismissal claims have helped prompt a 44% spike in such claims in one quarter*, as sacked employees rush to bring a claim before restrictions come in, says EMW, the commercial law firm.

EMW says that 15,300 claims for unfair dismissal were made in a three month period last year, up from 10,600 the quarter before.

EMW explains that, from summer 2013, the Enterprise and Regulatory Reform Bill is expected to introduce a fee for bringing a claim at an employment tribunal and cap the maximum pay-out for a successful unfair dismissal claim.

Jon Taylor, Principal at EMW, says: “The Government’s proposals will significantly limit the advantages of pursuing an unfair dismissal claim against an employer. The Government hopes this will reduce dissuade & lsquo;spurious’ claims in future, but the impending deadline has helped prompt a spike in claims.”

“People have been racing the Enterprise and Regulatory Reform Bill through parliament since it was announced last May, to get their claim in under the current claims regime.”

Jon Taylor adds: “There will have been a spike in very lightweight claims for unfair dismissal. The incoming changes increase the incentive for sacked employees to launch a & lsquo;free’ unfair dismissal claim now some people will be trying their luck while they still can.”

“Working through all these extra claims will add to the pressure already on the employment tribunal process. The system is struggling with an ever-growing backlog of cases still to be heard, leaving employers and employees in limbo as they wait for their cases to be resolved.”

“The spike will also include some genuine claims that people have bought earlier than they would otherwise have done. This includes those choosing to resign from a role before the changes come in order to bring a constructive unfair dismissal claim on more favourable terms.”

EMW says that under the proposed changes:

Former employees will only be able to claim up to one year’s pay or &pound74,200 (whichever is lower) from their former employer for an unfair dismissal. The Bill allows this cap to be lowered in future

Former employees will now have to pay a fee of &pound250 to make a claim and a fee of &pound950 if the case proceeds to a tribunal. There are currently no fees

Government struggling to make impact with unfair dismissal reforms

EMW says that the Government has struggled to make an impact with its previous attempts to ease pressure on the employment tribunal system.

In April 2012, the Government doubled the amount of time – from one year to two years –

that a person has to have been employed by a company before they can claim for unfair dismissal after a sacking.

In an analysis of over 100 unfair dismissal cases in which it was involved, EMW says that just one case was affected by the changes.

Jon Taylor says: “The Government’s previous attempts to ease employment tribunal congestion haven’t been a runaway success, while the latest changes appear to have had the opposite to the desired effect, at least in the short term. It will be interesting to see what the impact of these new changes will be.”

*Q2 2012/13 (year to 31st March 2013, quarter three months to September 30)


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