The Employment Rights Bill, one of the most significant pieces of employment legislation for decades, is set to get even more complex. The Government has put forward an amendment to extend the limitation period for most Employment Tribunal claims from 3 to 6 months. This was Labour policy prior to the election, but not included in the first draft of the Bill.
So is it a good idea?
It would certainly be a significant change. The current limitation period (3 months less one day, with the ACAS conciliation period effectively added on top) is significantly shorter than most claims brought in the civil courts (for example, the period for breach of contract claims is 6 years and for personal injury claims it's 3 years). Doubling the length of the period would almost certainly result in more claims, particularly from claimants who struggle to access legal advice and have to rely on the Citizen's Advice Bureau or free advice clinics.
There is arguably some justification for extending the period for certain claims, particularly those related to pregnancy and maternity discrimination: the prospect of instructing a lawyer while juggling a newborn is a daunting one.
And, if used wisely, a longer limitation period might give more time for internal grievance and appeal processes to be exhausted, or for settlement discussions to take place, so that more claims might be resolved without litigation.
However, there are also some major downsides, particularly for employers. Most obviously, there are likely to be more claims. Employers will also have a longer period of uncertainty after a contentious departure before they can regard themselves as “in the clear”. Combined with the removal of the qualifying period for unfair dismissal claims, this is going to mean increased compliance costs for many employers. With the Government being heavily criticised for failing to assess the financial impact of the Bill adequately, businesses will rightly be concerned about the impact.
There's also a more nuanced objection. A longer limitation period means an even longer period between the acts giving rise to a claim and its eventual resolution at trial, particularly in a Tribunal system which is already overloaded. Even straightforward claims are currently taking at least a year to resolve in the backlogged system and more complex claims can easily take 18 - 24 months. Delay results in memories fading. Key witnesses may have left the business by the time the trial takes place. In our experience, it often serves to harden the parties' positions, with increased costs making settlement more difficult to achieve.
Whatever your view of the reforms in the Bill, claimants and respondents alike can only hope that there is a significant injection of resource into the Tribunal system to deal with the likely influx of claims.
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