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Employment Law reform: what changes lie ahead for employment and equal pay claims?

It is 50 years since Equal Pay legislation came into force and key changes to employees’ rights at Employment Tribunal have been recommended by the Law Commission which could affect equal pay claims.

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Claire Powell and Ryan Bradshaw are lawyers who specialise in employment law and assess current pay challenges faced by disabled workers.

All employment claims could be brought within six months instead of the current three-month time limit and tribunals will have the power to award damages up to £100,000 in breach of contract claims instead of the current £25,000 limit.
 
The Law Commission recommendations were published  on 29 April 2020 in ‘Employment Law Hearing Structures’, a report on the Employment Tribunals and Employment law process in the UK
 
The report makes a series of recommendations for reform of the Employment Tribunal (‘ET’) process and is part of the government’s attempt to modernise and improve the court systems in England and Wales.
 
However, questions remain as to whether the report goes far enough, and if it will lead to real improvements in the justice system.
 
Recommendations to improve the way in which employment cases are decided include:
 
  • Time limits: Extending the period in which a claim can be brought from three to six months for all types of employment claims and changing the ‘test’ as to whether claims brought outside the time limit should be allowed from what is ‘reasonably practicable’ to what is ‘just and equitable’. This means that when a claim is presented after the six-month period has ended – including an equal pay claim – the court will have more discretion to let it continue, and the test is a lower bar for claimants to meet. 
  • Encouraging expertise sharing: ET Judges with experience of discrimination claims should sit on discrimination cases in other courts. This could benefit claimants in these proceedings, as the quality and expertise of the Judge would not vary depending on the court – encouraging accurate, consistent decisions. An informal ‘specialist list’ in the High Court QBD to deal with employment and discrimination related claims was also recommended. This is part of the Commissions’ aim to reduce the awkward overlap between the different courts – which can lead to anomalies and boundary issues. 
  • Damages: Giving tribunals the power to give damages in breach of contract claims of up to £100,000 (currently the limit is £25,000). This should reduce the need to pursue claims in the ET and then the County Court. It is also a long overdue increase, with the original limit of £25,000 set in 1994 – if that were adjusted in line with inflation that limit would be £50,000 in 2020 – showing the critical need for reform.
  • Workers and Employees: Confirming that the ET’s jurisdiction is over both categories of employment status. This would mean that all workers can bring claims related to alleged breaches in front of the ET – not just employees. This would include the large number of ‘limb B’ workers – such as those in the ‘gig economy’.  It also recommends allowing claims to be brought during employment and post-termination, not just at the time of termination itself.
  • Enforcement: starting a fast-track system within the ET to improve the payment of any damages awarded. At present, claimants must have a damages award enforced in the County Court – potentially incurring more time, distress and costs. The report suggests incorporating the enforcement procedure into the ET process and improving guidance for successful claimants. 
  • Equal Pay Claims: claims are presumed to be heard in the ET and where they are in the County Court transfer is the suggested procedure.
 

How will this affect my ongoing employment claim? 

There is unlikely to be any great change to existing employment claims – at least not in the immediate future. The report was produced in consultation with the government and was within the limits of reform that they had proposed which suggests that they are likely to accept at least some of the recommendations.
Equal pay claims will still be able to be brought in either the ET or the Civil Courts. However, the presumption will be in favour of the ET – and it may be that claims in the county courts are transferred. Claimants are still able to bring their claim in the County Court if they wish – allowing claimants to take advantage of the longer time limit – and the suggestion of the flexibility of judges who are expert in equal pay claims to sit outside the ET will mean any claim should involve appropriate decision makers.
Leigh Day are bringing claims on behalf of over 40,000 supermarket workers, which are being heard in the ET.

Time limits to bring your equal pay claim may be relaxed. The Law Commission recommends that tribunal judges be allowed to extend the time limit of six months where it is fair to do so. So, if you have a good reason for not bringing a claim within six months of leaving your employment, there may be some flexibility.

Finally, other employment claims may be eligible for higher awards of damages, and employees should be able to have their damages award enforced by the ET directly. More generally, these recommendations may lead to quicker, more consistent decision making with fairer awards for successful claimants.
Leigh Day are expert in all types of employment and discrimination claims.

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