Employment Tribunal limitation period to double and other updates to the Employment Rights Bill

Not long after the publication of the Employment Rights Bill, a substantial amendment paper has proposed a number of changes.

Perhaps one of the most notable proposals for employers is the increase to the limitation period in which claimants have to issue a tribunal claim from three to six months, marking a significant change to current employment litigation.

There has been much discussion over the years as to whether the current three-month time limit for most claims was too restrictive for claimants, particularly those seeking to bring a discrimination claim who may face barriers to doing so because, for example, they are recovering from illness or have recently given birth. For potential claimants, the increase to the limitation period would likely be welcomed, as it would provide breathing space to assess their case, take advice on the merits of their claim, and begin to navigate the legal process.

For employers, however, the proposed increase to time limits adds an element of increased uncertainty and means employers are subject to a prolonged risk of claims being brought. In addition, the increase to the limitation period is likely to have a number of knock-on effects; for example, the availability of witnesses who may have left the business by the time the business is aware of a claim, and, even if they remain with the business, their ability to recall relevant circumstances may be compromised. The longer limitation period may also present challenges in preserving evidence.

While the overall impact is yet to be seen, the increase to the limitation period would likely result in more claims being filed, which could be costly for the employer to defend. It may also lead to an even longer delay before a final hearing, given the increased pressure on an already stretched Tribunal system. Conversely, this could benefit both parties, by motivating them to explore ways in which to resolve the issues by way of ACAS Early Conciliation, Judicial Mediation and Judicial Assessment.

The revised reforms also include:

• Initial period of employment: As discussed in our article on the Employment Rights Bill, unfair dismissal is set to become a day one right; however, the regulations will modify the normal dismissal process for dismissals that occur during a statutory probationary period (known as an “initial period of employment”). The most recent amendments clarify that this will be between three and nine months, with the exact period to be set out in future regulations. This amendment would also enable the Secretary of State to specify the amount of compensatory award due to an employee where there is a finding of unfair dismissal during the statutory probationary period. This could potentially be lower than the cap on the compensatory award which applies to unfair dismissal cases.

• Gender equality: The amendments update the definition of “matters related to gender equality” to include menstrual problems and menstrual disorders. The impact of this could be that, under separate regulations, employers may be required to include menstrual problems and menstrual disorders in equality action plans.

Additionally, the amendment paper includes reforms put forward by individual politicians. The most notable of these includes a proposal to make a non-disclosure agreement invalid if the agreement seeks to prevent a worker from making a disclosure about harassment, including sexual harassment. Another interesting proposal is the prohibition of the use of substitution clauses in employment or worker contracts. The extent to which there is any appetite for either of these reforms is, however, as yet unknown. 

The Bill will now progress through both Houses of Parliament for review and discussion. Given the vast nature of the reforms, we anticipate that this amendment paper will be the first of a number of updates to the original Bill prior to the legislation coming into force.