In the spring edition of the Employment Law Newsletter, Tim Sheppard published an article entitled, “The Draft Employment Tribunal Rules: An Overview of the New Provisions?” The article discusses Mr Justice Underhill’s ‘Fundamental Review of Employment Tribunal Rules: Employment Tribunal Rules of Procedure’ (the “New Rules”). At the time the spring newsletter was uploaded the Government had not yet published its response to the consultation that had been carried out on the New Rules from September to 22 November 2012 (“the Response”). Accordingly, this article aims to provide an update as the Response was published on 14 March 2013.


It was previously understood that the government intended to bring the New Rules into effect in April 2013. However, this date has been pushed back to the end of July 2013 so that their introduction coincides with that of employment tribunal fees. The revised rules have not been published.

The reader will be aware that there are no transitional provisions – the majority of the new rules will apply to all claims from the implementation date, even those that have been presented to the tribunal before the new rules came into force.

The Response

The Response confirms that the majority of those who responded to the consultation welcomed Mr Justice Underhill’s proposals and that as a consequence, the government has largely adopted the draft rules and his recommendations. In addition, the forward to the Response advises that other valid points raised by those who responded will be reflected in Presidential guidance or in administrative changes to the functions of the tribunal.

To my mind there are seven areas that will be of most interest and concern to readers and these will be focused upon in the remainder of this article.

Mandate for Alternative Dispute Resolution and Pre-claim conciliation

One controversial change in the New Rules is that judges are explicitly mandated to encourage and facilitate the use by the parties of the services of ACAS, judicial or other mediation, or other means of resolving their disputes by agreement. The Response states that this rule will give judges a: “firm legislative basis from which they can raise such matters in confidence with the concerned parties”.

It is important that the reader is aware that the New Rules should be considered in conjunction with the Enterprise and Regulatory Reform Act. As a result of Section 7 of the Act (which is expected to come into force in April 2014) the government intends to introduce mandatory pre-claim conciliation.

Presidential Guidance

Mr Justice Underhill’s terms of reference were to ensure proportionality, speed and efficiency, simplicity, certainty and consistency. His proposal that the Presidents of the employment tribunals in England and Wales and Scotland produce written guidance to provide further detail on specific rules was welcomed by 93% of respondents to the consultation. It was generally agreed that this will help ensure consistency between different tribunals.

The following areas, in particular, were suggested as being those that would benefit from Presidential guidance: alternative dispute resolution; costs orders; withdrawal of a claim; use and significance of deposit orders; timetabling of oral evidence and the provision of written reasons. The Response states that the government has passed these suggestions on to the President.

“Sift stage”

Unsurprisingly, the introduction of a new sift stage is controversial. As Tim Sheppard explained in his spring article, New Rules 22-25 provide that an employment judge will review the pleadings soon after the ET3 has been received and can strike out either the claim or the response if they consider it to have no reasonable prospects of success. All or part of the claim can also be struck out if a Judge considers it outside of the tribunal’s jurisdiction.

The Response reveals that 61% of respondents to the consultation thought that introducing a sift stage would lead to better and earlier case management. We are also told that some concerns were raised that it might disproportionately affect those who do not speak English as a first language, or who have a disability that makes presenting information in a written format more difficult.

The Response does not address how the sift stage will operate. This is unfortunate in the light of the fact that the government has decided to go ahead with it. Although the government holds the view that the sifting stage may be an area where Presidential guidance would be useful, in my opinion this is debatable in light of the fact that Mr Justice Underhill was clear in his letter of 29 June 2012 that such guidance: “is not intended to be prescriptive: ultimately judges must have discretion to deal with particular cases before them”.

As the issues considered in the new sifting stage are covered in the current procedural rules one can predict that judges are likely to use existing case law as a guide. That said, one can predict that the judiciary will exercise great caution before striking out any claim or response as having “no” prospects of success, not least because they would not at this stage have heard any representations from the parties or had the assistance of counsel. In my opinion it will only be in the clearest of cases that a claim or response will be struck out, particularly where a complaint is made under the Equality Act 2010 or under Part IVA of the Employment Rights Act 1996. The power to strike out is repeatedly referred to as draconian and in Balls v Downham Market High School v College [2011] IRLR 217 the EAT stressed that it was a “high test”. Notably, the EAT was of the view that the employment tribunal should have regard not only to the material specifically relied on by parties but also to the tribunal file. It was stated at paragraph 7 that:

“There may, as in the present case, be correspondence or other documentation which contains material that is relevant to the issue of whether it can be concluded that the claim has no reasonable prospects of success. There may be material which assists in determining whether it is fair to strike out the claim. It goes without saying that if there is relevant material on file and it is not referred to by parties, the employment judge should draw their attention to it so that they have the opportunity to make submissions regarding it but that, of course, is simply part of a judge’s normal duty to act judicially.”

Although this was a case under the old rule 18(7)(c), if the judiciary do turn to existing case law then authorities such as Balls and also Timbo v Greenwich Council for Racial Equality (UKEAT/0160/12/SM) October 2012, are likely to be considered. Balls raises the question of whether a respondent might want to consider sending written representations to the tribunal for the assistance of the judge at the sift stage. Indeed, there is nothing within the New Rules which would prevent this. Similarly, a claimant could do the same upon receipt of the ET3. An alternative for respondents would be to include in their ET3 more detailed representations on why a claim discloses no prospect of success or should be struck out on jurisdictional grounds.

What is clear in my view is that where the pleadings reveal that there is a crucial core of disputed facts which are not susceptible of determination except by hearing and evaluating evidence (Eszias v North Glamorgan NHS Trust [2007] IRLR 603– followed once again in Timbo) – a judge will be unlikely to strike out a claim. For the time being we can only wait and see what is enacted as well as hoping that the Presidential guidance will at least provide parties with some certainty as to what they can expect the process to be.

Preliminary hearings

The proposal by Mr Justice Underhill that CMDs and PHRs should be combined into “preliminary hearings” was thought by most of those who responded to the consultation to be a good idea. However, it was not believed that time and cost would necessarily be saved unless they could still be dealt with by telephone and the parties were informed in advance what issues were to be discussed.

The Response confirms that the draft New Rules will be amended to provide that 14 days’ notice to the parties will be given when a preliminary hearing will deal with a preliminary issue such as strike out, deposit orders, or alternative dispute resolution. The notice of hearing issued by the tribunal will also outline the issues which are to be discussed at the hearing.


The consultation sought views on the following:

  • The proposal to remove the £20,000 cap on the level of costs that can be assessed by the tribunal without reference to the county court.
  • How to encourage a greater use of the costs regime.
  • How tribunals calculate costs for lay representatives.
  • Whether there were any problems with allowing litigants in person to claim for both their own preparation time and for witness expenses.

The Response states that the majority of respondents (53%) were unsure whether allowing tribunals to award costs over £20,000 was a good idea. Concern was expressed that employment judges lack the experience to do so and will require additional training. Nevertheless, the government has decided to go ahead with this proposal, being of the view that employment judges will still be able to refer costs assessment to the court if they wish.

It seems that the new costs regime is another area that would benefit from Presidential guidance. Importantly, the Response confirms that the government will encourage the Presidents to consider this.

The government has decided that lay representatives should be allowed to claim costs at the same rate as litigants in person claim for preparation time (£33 an hour). According to the Response, as no real disadvantages to allowing litigants in person to claim both preparation time and witness expenses were identified by the consultation, the government is going ahead with the proposal.

Deposit orders

The Response confirms that the government will go ahead with the recommendation of Mr Justice Underhill that the Employment Tribunals Act 1996 be amended to allow employment judges to make a deposit order in respect of a particular part of a claim or response, rather than just the whole of a party’s case. Provision for this is now set out in clause 21(2) of the Enterprise and Regulatory Reform Act 2013.

However, the government refused to give judges the power to make deposit orders at the new sift stage, despite this being requested by respondents to the consultation. The government holds the view that the best time for making such orders is at a preliminary hearing where the parties have the opportunity to discuss the case with the employment judge.

This is indicative of the likely remit of the sifting process. As the reader will know, under the current rule 20(1) a deposit order can be made where a claim discloses “little” reasonable prospect of success. The determination of whether or not a deposit order is appropriate therefore involves a merits assessment. Such orders tend to be considered at the same time as a judge is considering whether a claim has “no” prospects of success for the purpose of a strike out application. The government’s view that such merit assessments should only be made at a preliminary hearing suggests that an order striking out a claim at the sift stage will be rare.

Payment of awards and enforcement

The consultation sought views on whether a deadline of 14 days for payment of awards should be introduced, in the interests of encouraging prompt payment. This was welcomed by the majority of those who responded. The popular view was that this would provide greater certainty on the date on which interest would begin to accrue and of the date on which enforcement action could be commenced.

To this end, the Employment Tribunals (Interest) Order 1990 (SI 1990/749) will be amended to provide that interest will begin to accrue from the date of a judgment but will not be payable if payment in full is received within 14 days.

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