Everything you need to know
Changes being introduced to the Employee Rights Act will provide better protections for their work-related rights. Rather than changing everything at once, the government is rolling them out in phases, giving us the chance to cover the changes in-depth.
Some key changes will affect vital employee rights to tribunal claims. These changes will affect the tribunal process in a wide range of ways. This won’t just help your employees; by understanding the impact of these changes, you’ll be able to navigate the evolving world of employee rights more effectively. Here’s what you need to know about the upcoming changes to tribunal claims.
What you need to know about tribunal claims.
In case you didn’t know, a tribunal claim is a formal legal complaint made by an employee against an employer to resolve a workplace dispute. This means it must go through the necessary court proceedings to be resolved. The changes in the Employee Rights Act apply to tribunal claims- not HR complaints, which have their own separate process.
Claims are handled by the Employment Tribunal, which specialises in cases where employees believe their employer, ex-employer or prospective employer has unlawfully treated them. Most importantly, decisions are legally binding, meaning the complainant can be provided compensation if the ruling is in their favour.
What’s changing?
Deadline extension
Currently, the deadline for employment tribunals is three months from the date of the incident/dismissal; however, this is being extended to six months for most claims. Breach of contract claims will keep the 3-month deadline. It might seem like these changes are being implemented to weigh the odds in the worker’s favour. Instead, it’s to make the workplace a fairer place for both parties.
These changes will benefit business owners and management, ensuring workplace mediation is successful, minimising the risk of future issues. The 6-month window doesn’t just give employees more time to make a claim; it also provides employers with a realistic timeframe to resolve disputes internally through processes like Acas conciliation, which has been extended to 12 weeks. The old 3-month rule led to expensive tribunal cases that could have been resolved out of court with enough time. The extended timeframe will ensure your business doesn’t incur costs that could have been easily avoided.
Dismissal rights
Previously, short-tenure employees and ‘Limb (b)’ workers (zero-hours, gig workers, Uber drivers) could be dismissed within varying timeframes of starting work, without needing to cover certain protections. This ensured employers had vital security when taking on new staff.
The two years has now been reduced to a 6-month qualifying period, coming into effect on 1st January 2027. Employers can no longer dismiss employees without cause before the 2-year cutoff, providing employees with greater job security, as dismissal must follow a specific process after this timeframe.
Changes regarding day-1 entitlement to sick pay have also been implemented, meaning that those on zero-hours contracts gain the right to sick pay from their first day of employment.
This legislation will benefit employers by putting focus on early performance in the job role. Issues that could arise in the future are identified, creating an opportunity for skill development amongst your workforce. Additionally, requiring by-the-books dismissal processes helps to keep you protected in speculative cases.
Payout cap
Under current legislation, tribunals compensate employees with the lower of 52 weeks’ gross pay or £118,223-£120,000. The Employee Rights Act will eliminate this cap, meaning people with high-paying careers may be eligible for a significantly larger payout. These payments won’t be random; they’ll still be determined by age, length of employment, and weekly pay.
The compensatory cap will be removed entirely from 1st January 2027.
Summary
As with sick pay and hybrid working rights, the Employee Rights Act will have a huge impact on tribunal claims, and you and your employees must be aware of it. The legislation aims to create a fairer work environment and greater equality between employers and employees. The changes will make justice more attainable while providing employers with clear guidelines to avoid accidentally infringing on employee rights.
If you and your team need help adapting to any changes the Employee Rights Act brings, then you’ll need a team of experts by your side. People Matters HR can provide vital support and guide you through the legislation. Or maybe you need help from our trained negotiators if you’re involved with a tribunal yourself. Get in touch for more and we would be more than happy to help.