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 latest employment tribunal statistics – July to September 2016 – show a marginal increase of 2% in single claims compared to the same period in 2015 whilst there has been an increase of 45% for multiple claims for the same period. A multiple claim is one that contains multiple claimants on the same form.
The employment tribunal statistics show that the average time to dispose of a single claim was 26 weeks, but 205 weeks for a multiple claim.
4,300 single claims were received during July to September 2016 with 27,200 multiple claims and over 5,245 applications were made for remission of the issue fee which can range from £160 to £250. 4,623 claims received either full or partial remission. A fee remission can be applied for where a claimant does not have a certain level of savings in the bank and/or is on a low income or income support. A separate fee remission application must be submitted. Fewer applications were made for remission of the hearing fee which can range from £230 to £950.
There will be an increase in employment tribunal costs soon. The level of compensation an employment tribunal may award is due to go up on 6 April 2014 under the Employment Rights (Increase of Limits) Order 2014 (SI 2014/382. The maximum compensatory award for unfair dismissal will rise from £74,200 to £76,574. The maximum amount of a week’s pay, used to calculate redundancy payments or various awards including the basic or additional award of compensation for unfair dismissal, also rises from £450 to £464.
Tribunals will also have the power to impose financial penalties of from £100 up to £5,000 on employers who are deemed to have breached a worker’s employment rights with aggravating features. What an aggravating feature looks like has yet to be defined as cases proceed. The Enterprise and Regulatory Reform Act 2013, in its bill form, suggested that aggravating features could include:
The size of the employer
The duration of the breach of the employment right
The circumstances of the case and
The employee and employer’s behaviour
It also stated that a tribunal may be more likely to find that there are aggravating features where:
The action was deliberate or committed with malice
The employer was an organisation with a dedicated human resources team, and/or
Where the employer had repeatedly breached the employment right concerned
A tribunal may be less likely to find that there are aggravating features where an employer:
Has been in operation for only a short period of time
Is a micro business
Has only a limited human resources function, and/or
Made a genuine mistake
The tribunal shall judge an employers’ ability to pay and the penalty shall be paid to the Secretary of State. This initiative will be implemented on 6 April and shall apply to claims lodged on that day and thereafter. Even where no financial award has been made the employer may be required to pay a financial penalty anyway.
This may not be a welcome change for employers where the government has pledged to reduce red tape. However it has been said that the existing employment tribunal system is employer friendly (although not many employers will say that). The introduction of costs against an employer will be balanced out by the fees introduced for claimants to pay to lodge a claim. Recent case law has shown that successful claimants will also recover tribunal fees from a respondent with a costs order.
Research commissioned by the government has discovered that many employers are not paying out employment tribunal awards to successful claimants. The research was done by IFF Research – Payment of Tribunal Awards 2013 . It seems that currently rogue employers can get away with murder.
The research discovered many employers refused to pay. Therefore the government are considering bringing in new powers for judges to demand up front deposits from employers unwilling to pay..
If a company has stopped trading it can be difficult for claimants to get their money. At the moment with redundancy payments the Insolvency Service http://www.bis.gov.uk/insolvency can pay certain elements. The government will be looking at how such issues can be resolved.
If an employers fails to pay a claimant can pursue payment via either the county court or via the fast track scheme can access the services of a high court enforcement officer to act on their behalf. It appears that many claimants were not aware of enforcement.
According to the research 49% of claimants get paid in full with 16% being paid in part. Therefore more than a third receive no money at all and this includes even after enforcement action has been taken. Reasons for non-payment were the company was insolvent, the employer refused to pay or the employer could not be located.
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.
The Ministry of Justice has announced that it is introducing an online service for the payment of employment tribunal fees. According to the announcement, the facility to pay online will be available from July 2013. This suggests that the new fee structure proposed shall be introduced then.
At the moment it costs nothing to bring an employment tribunal claim, but following consultation in 2011 the government is introducing the new fee structure so as to be in line with other court processes where fees are paid. Currently it costs £84m to run the tribunal system funded by the tax payer; the government aims to reduce this burden whilst still promoting justice for all. However many on low incomes are not required to pay full court fees so the government will be reviewing this for employment tribunal claims.
The introduction of fees is part of the government’s plan to promote early resolution encouraging people to look for alternatives to using the court system. Alternatives would be mediation, ACAS conciliation or directly negotiated settlement.
Fees will be payable in advance and there will be a two stage process; a fee will be paid to start a claim off and another fee will be due to be able to go forward with a hearing should that be necessary. The level of fee will be dependent on the type of claim being brought. For level 1 claims that include unlawful deductions, holiday pay, notice pay, redundancy pay the issue fee shall be £160 with £230 hearing fee. For level 2 claims that include unfair dismissal and discrimination the issue fee shall be £250 and hearing fee £950.
In cases where more than one claimant is bringing the same claim the fee structure makes provision for this and has suggested fees accordingly.
Level 1 claims
Two to ten claimants
11 to 200 claimants
201 or more claimants
Level 2 claims
Two to ten claimants
11 to 200 claimants
201 or more claimants
With the Employment Appeal Tribunal the issue fee shall be £400 and hearing fee £1200.
Other fees linked to the process are as follows:
An application to set aside a default judgement– The fee would be £100 which would be payable by the respondent.
An application to dismiss a claim following settlement or withdrawal– The fee would be £60 although it has been recommended that when a party withdraws their claim the respondent should not have to pay to get their claim dismissed.
An application for judicial mediation– The fee would be £600 and is payable by the employer.
A breach of contract counter claim– The fee would be £160 payable by the employer.
An application for a review of a tribunals decision or judgement– The fee for this would be £100 for level one claims and £350 for level two claims.
It was reported recently that a union member was sacked by Salford Council for assault. He went to an employment tribunal and won his case for unfair dismissal. The tribunal found that the council had failed to establish that an assault had taken place. In fact the employee had merely brushed past the manager with whom he was having a heated disagreement in a narrow corridor.
Such a case highlights the importance of rigorous investigation before taking disciplinary action particularly dismissal. All witness should be thoroughly interviewed at least once if not several times if discrepancies come to light during the investigation process. They should be interviewed individually using a question and answer format. Alternatively they should be asked to provide their own statement which should be done whilst supervised. All relevant paperwork/evidence should also be collated. The process can be conducted by managers or, as it can take up time, by an experienced HR consultant. Sufficient time should be taken to ensure the investigation is completed well and a comprehensive report written up. The investigation forms the basis of whether to go forward to a disciplinary hearing or not.
It should aim to leave no stone unturned and, if done correctly, can prevent a costly miscarriage of justice.
In a recent employment tribunal case of a claimant who lodged a claim for unfair dismissal and sexual harassment, it was decided that she was lying in revenge for being sacked.
Throughout an employment tribunal process it is important to be honest and truthful in all dealings which begins with being up front to your representative right at the very start whether you are respondent or claimant. Your representative needs to know all the main details so they can represent you appropriately. If you or your witnesses tell untruths about any aspect of your case do not fear you will be found out at some stage. If your representative finds out later in the process that you have not been completely honest they might drop your case. If this is done at the last minute you might end up no representation.
If you maintain any falsehoods you will be exposed by the other side’s representative and/or the highly experienced employment tribunal panel closely scrutinising the paperwork and your testimony. When you lie it is difficult to maintain a consistent story and this will cast doubt.
Lack of honesty will lose you the case even if it initially had high prospects of success.
Osborne has just proposed the introduction of “fire at will” dismissal law that will enable small employers to dismiss staff more easily. The employment minister Norman Lamb is unveiling plans during March which would remove restrictions on laying off staff at businesses with fewer than ten employees. It is proposed that poorly performing employees are laid off whilst the employer can recruit staff who will perform more effectively. It is claimed that current rules allow employees to “coast along” without management action. The proposal is designed to support the “cutting the red tape challenge” and increase employment. However, the latter is debateable whether employment legislation is contributing to increasing unemployment.
There are plenty of employers in the UK that do not currently adhere to employment law and in treating their staff poorly run the risk of incurring an employment tribunal claim during which successful employees have the right to be compensated for lost employment rights.
Should the government introduce their proposal of compensated no fault dismissals, employment rights will be diminished. The government’s proposal is underpinned by an anticipation that the value of small businesses to the economy will increase. However the danger of changing the law to allow easier dismissals for small companies could instead backfire and scupper the government’s plans of their contribution to economic growth.
There could be many underlying reasons of poor conduct that require deeper investigation and promotes fair treatment. If the law is changed and small businesses are allowed to operate in a “fire at will” manner, the effects on employee morale within a company could be very damaging. Company reputation will also suffer and have a negative impact on the bottom line. If the dismissal has a discriminatory angle employees have the right to go to an employment tribunal regardless of length of service adding to costs.
Poor performance, regardless of company size, is easy to manage through a fair process of monitoring and support. Practical advice can easily be sought from an HR practitioner.
The government needs to carefully think about the introduction of such a proposal. Coupled with their firm intention to introduce fees for claimants to lodge an employment tribunal claim, access to employment rights for many down trodden workers will be, all but, practically removed. This will mean going back to before the beginning of the 20th century when protection for worker rights began and will not be good for the future.