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29 June 2020

248: Law Commission recommends increased powers for employment tribunals

The Law Commission, which promotes law reform, has recently published an important report on the reform of Employment Tribunals. This follows a consultation which closed in January 2019.

The report sets out 23 recommendations which will be considered by the government. Although the Law Commission does not have any enforcement powers, the government should provide an interim response to the report within six months, and a full response within a year setting out which of the recommendations will be accepted, rejected or implemented in a modified form. In the past, over two-thirds of the Law Commission’s law reform recommendations have been implemented, so it is likely that at least some of the reforms below will be accepted.

Key proposals include:

  • extending the time limit for bringing all Employment Tribunal claims from three months to six months, including breach of contract claims;
  • introducing a single ‘just and equitable’ test when considering whether to extend time limits, rather than the current ‘not reasonably practicable’ test used for most types of claims. This is likely to result in fewer claims being struck out for being out of time;
  • allowing Employment Tribunals to hear breach of contract claims by employees and workers, and related counterclaims by employers, which arise while the contract is still in place and after termination. Currently Tribunals can only hear breach of contract claims arising or outstanding on termination;
  • increasing the limit on the maximum award for breach of contract claims from £25,000 to £100,000;
  • giving Employment Tribunals the power to interpret contractual terms contained in a statement of particulars;
  • broadening the power to hear unlawful deductions from wages claims to include claims for unquantified sums and the jurisdiction to apply set-off principles;
  • extending the jurisdiction of the Employment Tribunals to include claims by workers in relation to maximum working time limits under the Working Time Regulations 1998;
  • introducing a power to transfer equal pay claims from the High Court to the Tribunal, with a presumption in favour of a case being transferred;
  • allowing respondents to claim a contribution from others who are found to be jointly and severally liable for employment-related discrimination;
  • considering the possibility of introducing a fast-track enforcement system and extending the current penalty scheme so that it is triggered automatically by the issuing of a Tribunal award; and
  • introducing flexibility for Employment Tribunal judges to hear discrimination claims in the civil courts.

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