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. This is according to law firm EMW. The law firm claims that 15,300 claims for unfair dismissal were made in a three month period last year, up from 10,600 the quarter before.
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 ‘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 ‘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.”
Under the proposed changes:
- Former employees will only be able to claim up to one year’s pay or £74,200 (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 £250 to make a claim and a fee of £950 if the case proceeds to a tribunal. There are currently no fees