Several changes have been made to the Employment Tribunal proceedings in England, Wales and Scotland over the past two years. Further changes will also come into effect in the near future.
Changes to date:
Since 29th July 2013 claimants have needed to pay to lodge a claim at a tribunal and pay another fee to have a claim heard. The majority of claims will be Type B Claims which cost £250 to file and a further £950 to hear.
- Type B claims include unfair dismissal, equal pay, failure to inform or consult under TUPE, failure to allow compensatory rest under the Working Time Regulations, breach of the right to request time off for training, discrimination. (Type A claims are £160 and £230 and include unlawful deductions from pay, notice pay, refusal to allow holiday and redundancy pay). This list was expanded on 6th April 2014
- Employment tribunal statistics, released in March 2014, show the number of claims made per month between October and December 2013 were 9,801, which is 79% less than the same period the previous year (and 75% fewer than in the previous quarter).
- There has been much debate on the fairness of the fee system – with UNISON applying for a judicial review that was heard in October 2013 but which was overturned in February 2014. However, UNISON has lodged an appeal against this decision to the Court of Appeal; this second appeal was again dismissed in December 2014.
- With the publication of the new tribunal statistics, many commentators are pointing out that 79% less people are either no longer prepared to take a tribunal claim, or more importantly can’t afford to. While it is good news for employers who don’t need to spend legal fees on defending all tribunal claims, including dubious and spurious claims, the huge drop in claims will include people with valid claims but who are not able to take action to enforce their rights, as they are put off by the fees or by the complexity of obtaining a fee exemption (called a remission).
- Since the introduction of the fees however, employers who lose tribunal claims are likely to be ordered to reimburse the claimant for the tribunal fees they have had to pay.
- While UNISON has already argued against the fees, this latest drop in claims may mean the fee system is challenged as being in breach of the provisions of the EU Equal Treatment directive, which requires EU member states to provide access to an effective right of recourse for discrimination cases. The High Court that dismissed UNISONS’ challenge against the fees made it clear that the fee regime would need to change if the EU requirements were infringed.
- Some commentators argue that in order to preserve access to the justice system rather than wishing solely to drive down the total number of claims, the government should have instead firmed up employment judges’ powers to award costs against individuals bringing spurious claims.
- Some commentators believe the fees may also drive up Trade Union membership as a way of employees defending their interests, especially if the Union pays their fees.
Introduced on 6th April 2014, but made fully effective on 6th May 2014 – all tribunal claims will need to go through a pre-conciliation process with ACAS. This is intended to resolve employment disputes before the claim reaches a tribunal.
Conciliation will be available for 1 month, which can be extended by a further 14 days. Full details are here.
Employment Tribunals guidance from gov.uk is here and you can start the online application process here.
A few extra points about pre-conciliation:
- This it is not intended to offer an independent evaluation of a claim at any early stage, regardless of if the claim is likely to succeed or not.
- Employers may feel there is little incentive to enter into conciliation talks if they suspect an employee will be unwilling to pay the fees. However, early conciliation discussions may make the claimant change their mind about going to a tribunal.
- The Government believes it is in everyone’s interest to avoid long drawn-out disputes and that conciliation may encourage more settlements ,which may not need to be very complicated or expensive for Employers.
From 6th April 2014 when an employment tribunal finds in favour of a claimant (individual) it will have the power to impose a financial penalty on the employer for breaching the statutory employment obligations it owes to that individual, alongside the ability to award compensation or awards in respect of injury to feelings in discrimination cases.
- This can happen in cases where there is a breach of the individuals statutory rights, which has one or more “aggravating features” and is intended to reduce deliberate and repeated breaches of employment law.
- The financial penalty will be between £100 and £5,000 (it will be 50% of any compensation award made to the individual, capped at £5,000). The penalty will be reduced by 50% if paid within 21 days. The penalty is paid directly to the Secretary of State and not to the individual.
- The tribunal can decide whether to impose a penalty or not and will take into account the employers ability to pay
There is no statutory definition of what an “aggravating feature” is but the explanatory notes to the legislation says an employer is more likely to face a financial penalty when:
- The action was deliberate or committed with malice;
- The organisation had a dedicated Human Resources team, or;
- The employer repeatedly breached the employment rights concerned.
So the potential financial exposure for employers with employment claims will be increased as they risk paying compensation to a successful claimant, being ordered to reimburse the claimant for their tribunal fees they have had to pay and this new financial penalty.
If you are an Employer and need ongoing professional help with any staff/freelance issues, or a Contractor/Freelancer/Employee with a complicated employment related problem, then talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small businesses – our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.
Please note that the advice given on this website and by our Advisors is guidance only and cannot be taken as an authoritative or current interpretation of the law. It can also not be seen as specific advice for individual cases. Please also note that there are differences in legislation in Northern Ireland.