Big Changes to Employment Law – Tribunal Fees; Unfair Dismissal Compensation; Protected Conversations

Employers and their Human Resources advisers face constant difficulties in trying to avoid potential pitfalls posed by current employment and discrimination law. This bulletin addresses, in a practical way, some issues commonly dealt with by Human Resources departments and gives realistic guidance on how to reduce the risk of employment related litigation in these areas.


Cap on unfair dismissal compensatory award

In an unfair dismissal claim, the most valuable element of compensation is usually the compensatory award, which is primarily based on the employee’s net loss of earnings resulting from their dismissal. On 29 July 2013, the upper limit on this award will become either the statutory maximum (currently £74,200) or 52 weeks’ pay of the employee concerned, whichever is the lower amount. This change will therefore potentially limit the value of an unfair dismissal claim for lower earners.

Fees in the Employment Tribunal

From 29 July 2013, claimants will have to pay a fee if they wish to bring a claim in the Employment Tribunal. The fee will be either £160 or £250, depending on the type of claim. Fees will also be payable at other stages of the Tribunal process, for example, there will be a hearing fee of either £230 or £950. This is a significant change as presently no fees are payable and costs are rarely awarded meaning that this is likely to reduce the number of claims lodged.

Dismissal on political grounds

Employees are now protected from being unfairly dismissed if the reason for their dismissal relates to their political opinions or affiliations.

Whistleblowing disclosures

Changes in the law took effect on 25 June 2013 whereby disclosures under the whistleblowing regime (a) no longer need to be made “in good faith” (although where they are not, the Tribunal has the discretion to reduce any compensation awarded by up to 25%) and (b) must now be made “in the public interest”. Employers may also be held to be vicariously liable for any detriment that a whistleblower suffers from his co-workers.

Pre-termination negotiations and settlement agreements

On 29 July 2013 changes will be introduced to make negotiations about the possible termination of an employee’s employment inadmissible in unfair dismissal claims. However, this new concept will have limited practical value as such discussions would still be admissible in other types of claims, for example, a discrimination or breach of contract claim. Also, compromise agreements will be renamed “settlement agreements”. Keep an eye out for further developments in these areas.

Employee shareholders

The new concept of “employee shareholder” will be introduced with effect from 1 September 2013. In summary, this is where the employee is given shares in their employer (with a minimum value of £2,000) and in exchange they must give up some of their current employment rights, such as the right to claim unfair dismissal or receive a statutory redundancy payment.


Q. One of our administrators has been seen by his colleagues playing tennis at the local park during working hours. As a result, we engaged a private investigator who covertly filmed our administrator playing tennis in the park on three subsequent occasions during working hours. Can we rely on this covert surveillance when carrying out our disciplinary investigation?

The recent case of City and County of Swansea v Gayle [2013] dealt with this very issue. In this case, Mr Gayle was employed by City and County of Swansea (the “Council”). The Council had good reason to suspect that Mr Gayle was playing squash during working hours whilst still claiming payment for being at work at the time and therefore it hired a private investigator to secretly investigate. The covert surveillance confirmed their suspicions. As a result, the Council dismissed Mr Gayle for deliberately claiming time he had not worked and for carrying out his own personal activities during working hours.

Mr Gayle lodged a number of claims against the Council, including a claim for unfair dismissal. The Employment Tribunal found that his dismissal had been unfair, but awarded no compensation on the basis of Mr Gayle’s contributory fault. The Council subsequently appealed to the Employment Appeal Tribunal (“EAT”). The EAT allowed the appeal. It held that the Council’s use of covert surveillance of Mr Gayle’s fraudulent activities in a public place did not make its disciplinary investigation unreasonable. It held that a person conducting his own personal activities in a public place, whilst receiving his employer’s money from his employer’s business, can have no reasonable expectation of privacy.

This recent decision highlights that although you may be able to rely on the covert surveillance as evidence, you do first need to think very carefully about the reasonableness of your disciplinary investigation. It will not always be fair or reasonable for you to use covert monitoring as part of such investigations. It is incredibly important to strike a balance between your need to gather evidence and your administrator’s right to be treated fairly and reasonably throughout the disciplinary process. For example, you should consider whether any witness statements you have gathered from Mr Gayle’s colleagues provide sufficient evidence for your investigation. If they do, you may wish to proceed without the covert surveillance forming part of the evidence in your investigation. You should also ensure that you have complied with any monitoring policies or procedures that you may have in place before relying on any covertly obtained evidence.

In summary, covert monitoring of employees should never be the norm and should not be used in every case. In particular, it should not be used in private places where an employee would have a reasonable expectation of privacy. Employers would be well advised to ensure that they have policies and procedures in place which deal with monitoring, including covert monitoring and data protection issues.

If you have any queries regarding the above or need assistance with any employment law issue, please contact Alison Downie, Head of Employment at or Lucy Bloom at or any member of the employment team.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised this article please contact the author or call 0207 404 0606 and ask for your usual Goodman Derrick contact.