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Two employment tribunal changes employers need to know about

If you're an employer, the one thing that's guaranteed to take the spring out of your step is receiving the dreaded ET1 - the form which notifies you that an employee (or, more often, former employee) is taking you to the employment tribunal.

Then if you lose you can have hefty compensation to pay, as well as expenses.

You'll want to know, then, that there are two changes coming into force on April 6 which will have a significant impact on the way the disputes process works, as well as the outcome for employers who lose their cases.

1 Early conciliation

Disgruntled staff who feel this is the only way to settle their issue with an employer will no longer be able to go straight to the tribunal. Anyone who wants to lodge a claim at the tribunal will be forced to sit at the negotiating table first, in an attempt by the Government to prevent cases going to tribunal unnecessarily.

The new concept of 'early conciliation' will apply to all workplace disputes, and will mean anyone intending to lodge a claim with the tribunal will first be obliged to contact the Advisory, Conciliation and Arbitration Service (ACAS).

ACAS will then have one month to offer its free early conciliation service to try and settle the dispute between the parties as quickly and cost-effectively as possible. If the conciliation talks fail, ACAS will issue a certificate allowing the claimant to submit a form to the tribunal. Submitting a claim without a certificate from ACAS will not be allowed under the changes.

In many respects, this is no bad thing. Employment tribunals by their nature are combative, stressful and, clichéd though it may sound, there are often no winners. Certainly, there are often bridges permanently burned on both sides.

Settling disputes early before they come before an employment judge can take some of the tension and anger out of a dispute, since the idea is that both parties come to a mutually-agreeable resolution.

From a practical perspective, the process will bring to light the gravity of the issues being raised by the employee, providing an opportunity for employers to settle claims early and save money.

However, some employers could use that as a way to ascertain the level of the threat against them, and choose to approach the conciliation with a set tactical agenda. Even if the conciliation fails, the person making the claim will have to pay the cost of lodging it at the tribunal, which gives the employer a hand to play.

By the point in the process where early conciliation applies, however, the employee may have decided that a tribunal is the only outcome they want. In that case, conciliation will be unlikely.

Early conciliation will be available from April 6 and will be mandatory for all claims to be lodged with the tribunal on or after May 6.

2 Tribunals will have power to impose fines

Employers which find themselves on the wrong end of an employment tribunal will generally be given some kind of order to pay compensation to the claimant. Under new powers awarded to the tribunal, however, they can also be hit with a financial penalty on top of that.

The amount imposed will be half of the compensation awarded, up to a maximum of £5,000, although will only be handed out at the tribunal's discretion. The fines will be used where a tribunal finds an employer's breach has more than one 'aggravating feature', or where the employer displayed 'unreasonable behaviour'.

To some larger companies, £5,000 may not seem like a disaster, but consider the cost and hassle which will have been incurred just to get to that point. An extra fine will make most companies wince, and sends a pretty clear message; particularly when you take into account the reputational damage. Having an additional fine imposed indicates a level of severity which doesn't make great reading for investors, future employees, or other parts of the business.

As ever, when changes like these come into effect, it's a good idea to review your internal processes and make sure you check the risks again the changing regulatory landscape.

Ann Frances Cooney is a senior associate at law firm HBJ Gateley

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