New employment tribunal laws come into force today

The start of the new tax year sees the introduction of new rules aimed at further reducing the number of Employment Tribunals. This follows the introduction of tribunal fees last July which saw claims for unfair dismissal and other complaints against employers fall significantly.

The government’s aim is to ensure that Employment Tribunals become the last resort for resolving employment disputes and to deter spurious claims against employers.

A person wanting bring a case of unfair dismissal or discrimination against their employer now has to first notify the conciliation service ACAS to see if the dispute can be resolved. Only after having consulted ACAS and no resolution been found, will the employee have access to a full Employment Tribunal.

Another change sees employers facing fines if they lose a case at tribunal. If an employer loses a case brought by an employee or former employee, and is shown to have especially poor workplace practices, it could be fined up to £5,000 on top of any back pay that is due to the employee.

By acting as intermediary and offer conciliation services, ACAS will seek that employer and employee agree a settlement without the need for an Employment Tribunal. However, if conciliation is refused or fails, ACAS will issue a certificate allowing the employee to submit a claim to the Employment Tribunal.

Whilst contractors working with an umbrella company are legally the employees of the umbrella company, often a contractor will name the employment agency as Respondent in a claim for unfair dismissal or discrimination. Therefore it is essential that the employment agency can rely on the umbrella company to minimise the risk of exposure to an Employment Tribunal.

At JSA we invest heavily in compliance and customer service, which has protected our business and our agency partners. We subject our business to regular voluntary compliance reviews and retain the services of leading employment law specialists to guide us through the ever-changing legislation.

As a result, over the past three years only two of the 25,000+ contractors JSA has worked with have made a claim against us or one of our agency partners. Both times JSA acted as second Respondent with the agency, and both times the claims were rejected by the Tribunal.

There’s no doubt the change in the legislation will reduce the number of claims that make it through to a full Employment Tribunal, but engagement with ACAS will be no less time consuming for the employment agency.  However, with a fully-compliant, customer-centric umbrella company on side such as JSA, the agency can be sure it has managed this business risk appropriately.


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