Breaking news today from the Supreme Court, who have decided that employment tribunal fees introduced in July 2013 are unlawful as they prevented access to justice and breached UK and EU law.
The case was taken to the Supreme Court ultimately by Unison who have fought this long and hard, but now successful battle. Many of the employees who have paid fees to take their employer to tribunal will now need to be refunded. The government will have to now pay out a whopping £27 million. Before July 2013 employees could take their employer to a tribunal without charge, but this changed in 2013 when fees topping £1200 were introduced for claims related to unfair dismissal and discrimination. This has lead to a dramatic decrease in the number of claims being lodged – 78% in three years. The reduction has probably been due to a lack of affordability by many employees unable to do anything about any potential unfair illegal treatment at work. If someone was unfairly dismissed they would more than likely not have the funds to take a claim having lost their job and income. This would be particularly relevant to employees with a with low or middle income.
Time will tell how the government will tackle the need to make changes. Whilst the Supreme Court has indicated employment tribunals should be free, tribunal fees may not be completely abolished but may perhaps be vastly reduced. The government will probably organise a consultation exercise before implementing any changes to fees.
In July 2013 the government introduced a mandatory one month ACAS conciliation period which has helped to resolve approximately 90% of cases without going to an employment tribunal. This process will probably still be retained as it appears to have been very successful in helping to reduce the thousands and thousands of claims that used to swamp the employment tribunal system.
Nevertheless, it seems that this barrier to justice will now be removed so law-breaking employers should beware.
The government has recently announced that from April 2014 there will be penalties for employers who lose at employment tribunal. This change is part of the reform of the employment tribunal system in accordance with the The Enterprise and Regulatory Reform Act 2013. The penalty will be paid to the Secretary of State with a minimum of £100 and a maximum of £5000. A penalty can be awarded against an employer even if the employee has not been successful in their claim and is separate to financial compensation to an employee who is successful.
The tribunal will have the power to make an order where the employer’s breach has ‘one or more aggravating features’ (a term which is not further defined in the legislation) or where the employer’s breach involves unreasonable behaviour (for example where there has been negligence or malice involved).
The Tribunal can take into account the employer’s size and resource, the duration of the breach of the employment right and the behaviour of both the employer and employee. If a financial award is awarded at Tribunal, then the financial penalty must be 50% of the amount of the award. If the employer pays the penalty within 21 days they will get a 50% discount.
Multiple claims in respect of the same act and the same workers are treated as a single claim.
A tribunal cannot review an order to pay a penalty if they subsequently award compensation for failure to comply with a Tribunal recommendation or reinstatement or re-engagement order.
I recently represented a claimant case in Nottingham employment tribunal. The claimant waiting room was eerily quiet being empty when we walked in. This was compared to sixteen months earlier when I had represented another claim there and the room had been packed out. My latest case lasted three days and during that time we hardly saw any other claimants and representatives in the waiting room. The case ran over and the judge had to assign another day so the remaining witnesses could be cross examined, representations could be made and the verdict decided upon. He reluctantly did this saying the government had cut back his sitting days dramatically. This seems to be the shape of things to come.
On Monday 29 July under the The Employment Tribunals(Constitution and Rules of Procedure) Regulations 2013 the government introduces tribunal fees for claimants wishing to lodge a claim and then to request a hearing. The last day, therefore, for bringing a fee-free employment tribunal claim will be by 4pm on Friday 26 July. Any claims already in the system will not attract fees.
Following the introduction of the fee system the fees will be repaid to the claimant if they win.
Type A claims (including unlawful deductions, notice pay, equal pay and redundancy pay) will cost £160 to lodge the claim, with a £230 hearing fee; and
Type B claims (including unfair dismissal and discrimination) will cost £250 to lodge the claim and a £950 hearing fee.
Appeals will cost up to £1,600. Witnesses’ expenses will no longer be paid.
Fees will be either paid online via credit or debit card or by cheque or postal order.
There will also be a fee remission system, which will attempt to ensure that access to justice is not reduced through the introduction of tribunal fees. This will apply to individuals in receipt of certain benefits or who have a disposable monthly income below a certain level. The income of a claimant’s partner will be taken into account though when determining whether a fee remission is given.
The potential cost of losing an employment tribunal will rise to £20,000 which will further discourage claims. Tribunals are increasingly awarding costs to the losing party which will further discourage claims being brought.
Employment tribunals were introduced in the early 1970s by a Tory government as a way of preventing strikes over unfair dismissals and workplace injustices. Tribunals can award compensation, but cannot force an employer to take back a worker judged unfairly dismissed. With the changes to the employment tribunal system it seems that rogue bosses will once again have the upper hand and claimants will have to think twice about the implications of lodging a claim.
The unions are already pitting their wits against the government claiming it is unlawful to deny citizens the right to take a free claim in pursuance of their employment rights. The fee structure law will be implemented on 29 July, but if the unions win in court the fees will be refunded.