Tag Archive: tribunals

Supreme Court ends employment tribunal fees with immediate effect

Employment tribunal fees were introduced for the first time in July 2013, and have been subject to challenge ever since. Over the course of the last 4 years, UNISON has launched two judicial reviews, both of which were unsuccessful in the High Court.  In 2015, UNISON’s appeal to the Court of Appeal failed.   Leave to appeal to the Supreme Court was granted and, following a two day hearing earlier this year,   this long running saga finally ended today when the Supreme Court decided to unanimously uphold UNISON’s appeal.

UNISON had asserted, and the Supreme Court agreed, that the 2013 statutory instrument implementing employment tribunal fees (the Fees Order) is unlawful for three reasons:-

  • First, it restricts the right of individuals to be permitted access to justice. Such a restriction is only lawful if it can be shown to be a proportionate means of achieving a legitimate aim, a test which, the Supreme Court decided that employment tribunal fees do not satisfy.
  • Second, the Order is inconsistent with the primary legislation under which it is implemented and frustrates Parliament’s intention both to provide individuals with substantive employment rights and to provide an accessible and affordable venue in which to enforce those rights.
  • Third, the fees regime discriminates directly against women and there is no objective justification for this discriminatory effect.

Largely the arguments at the Supreme Court centred on whether or not the fees regime could be objectively justified.  That is to say, whether or not the regime pursued one or more legitimate aim and if the regime was a proportionate means of achieving those aims.  The Government’s aims in introducing fees included transferring a portion of the costs of the tribunal service to end users and encouraging people to use alternative services to resolve disputes. Although the Court accepted that these aims were legitimate, it fully upheld UNISON’s contentions that the regime was disproportionate. The Court found that the level of fees under the regime has acted as a deterrent to claims and imposed an unjustifiable intrusion into access to justice. As such, the Court declared the regime unlawful under both UK and EU law.

What happens next?

  • As a result of its decision, the Supreme Court has quashed the Fees Order, which means that, with immediate effect, fees will no longer be chargeable for claims in employment tribunals.   Naturally, this is likely to lead to a rise in the number of disputes between employers and employees which reach the employment tribunal.
  • The Government had previously given an undertaking to repay all fees paid under the regime from its July 2013 implementation date if the fees regime was subsequently found to be unlawful. The Supreme Court confirmed today that this undertaking will now be fulfilled.
  • Although this cannot be predicted with any certainty, it is possible that the Government may, in future, seek to implement a revised fee regime which takes account of the need for proportionality.     Given the outcome of the Supreme Court case, the Government may prefer to implement any new regime via an Act of Parliament, rather than using an Order.  This would, of course, require the regime to be debated and approved by Parliament; a process which would be likely to affect the shape of any new regime.

Update – 18 August 2017

On 18 August 2017, the Presidents of the Employment Tribunals in England/Wales and Scotland issued further case management orders lifting, with immediate effect, the stay (sist, in Scotland) on all claims or applications brought to the employment tribunal in reliance on the decision of the Supreme Court in R (on the application of Unison) v Lord Chancellor (Unison case).

Applications for reimbursement of fees, or for the reinstatement of claims rejected, or dismissed, for non-payment of fees, will now need to be made in accordance with administrative arrangements to be announced by the Ministry of Justice (MoJ) and Her Majesty’s Courts and Tribunals Service (HMCTS) shortly.  All other claims will proceed to be considered judicially in the usual way.

According to the Explanatory Notes to the Orders, the Orders have been made on the basis that the intentions of the MoJ and HMCTS in relation to the practical implications of the Unison case have become clearer and that it is expected they will be making an announcement in relation to the relevant administrative arrangements shortly – as a result, it is apparent that the reimbursement of fees and the reinstatement of rejected, or dismissed claims, for non-payment of fees will be dealt with administratively and almost certainly without the need for judicial intervention or judicial decision.

For now, therefore we must await details of the administrative procedures which will apply.   Reports suggest, however, that details of the refund scheme will not be published until September.

Update – 9 August 2017

By way of update, on 9 August 2017, the President of the Employment tribunals issued Case Management Orders ordering that all claims or applications brought to the Employment Tribunal in England, Wales and Scotland in reliance upon the decision of the Supreme Court in R (on the application of Unison) v Lord Chancellor  will  be stayed (sisted, in Scotland) to await decisions of the Ministry of Justice (MoJ) and Her Majesty’s Courts and Tribunals Service (HMCTS) in relation to the implications of that decision.  Anyone who wishes to make representations in relation to the further conduct of these claims or applications is ordered to apply to the Regional Employment Judge for the relevant Employment Tribunal region or, in Scotland, to the President of Employment Tribunals (Scotland).

The impact of these Orders appears wide enough to  include applications for refunds of fees and claims that were rejected or dismissed because fees were not paid. It may also cover new claims which had not been brought previously because of fees and in which an extension of time is now sought.  However, the Orders’ Preamble do have regard to rules 11 and 40 of the Employment Tribunals (Constitution and Rules of Procedure)  Regulations 2013 which relate to rejection or dismissal of claims for non-payment of fees (or absence of remission) which suggests that the scope of the Orders may be limited to reinstatement of claims that were previously struck out or dismissed for non-payment of fees.  We must now await the decisions of the MoJ and HMCTS.

 

Permanent link to this article: http://www.dlapiperbeaware.co.uk/supreme-court-ends-employment-tribunal-fees-with-immediate-effect/

Government action on holiday pay claims

BIS has announced this afternoon that a statutory instrument is being laid before Parliament to limit back pay in holiday pay claims to a maximum of two years. The limit will apply to claims brought on or after 1 July 2015. Click here for a copy of the press release.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/government-action-on-holiday-pay-claims/

Challenge to employment tribunal fees fails

Gurpreet Duhra, a Partner in our Sheffield office comments: The High Court has dismissed a second judicial review application by Unison challenging the introduction of employment tribunal fees.  This means that, for now, employees will still have to pay a fee to bring a claim against their employer.  It appears, however, that permission to appeal has been given.  This issue is also riding high in the political arena with the Labour party indicating that, if it is elected in 2015, it has plans to reform the system.  Fees therefore remain a hot topic and future developments seem likely.

Employment tribunal fees were introduced for the first time in July 2013. Claimant employees who do not qualify for fee remission (which is only available in very limited circumstances) must now pay an issue fee to bring their claim (ranging from £160 – £250), and a hearing fee to have their case heard (ranging from £230 – £950).  This has had a dramatic impact in terms of the number of claims being brought. The latest employment tribunal statistics for the period July – September 2014 show a 61% drop in the number of single claims compared to the same quarter in 2013.

In February 2014, the High Court rejected Unison’s first judicial review application on the grounds that it was premature and that insufficient evidence was available to challenge the introduction of fees. In September 2014, following the publication of statistics which demonstrated a significant reduction in the number of claims being brought, the High Court granted permission for a second judicial review. This was heard on 21 and 22 October 2014 and judgment was handed down today, 17 December 2014.

The High Court has, however, again rejected the application.  This time round, Unison had relied on two grounds of challenge. The first was the EU principle of effectiveness. This is based on a premise that costs cannot be such that it is virtually impossible or at least exceptionally difficult for a significant number of potential claimants to bring a claim. Secondly, Unison argued that the fee scheme operated in an indirectly discriminatory way with respect to women, ethnic minorities and the disabled and that that was not justified.

On the first ground, despite finding that the “reduction in the number of cases brought is striking”, the court was unwilling to find that there had been a breach of EU law. It said that there was “no evidence at all that any individual has even asserted that he or she has been unable to bring a claim because of cost”. In its view, the court could only test the argument if there are actual cases which will enable the court to review the principle of effectiveness in concrete situations.

In relation to Unison’s second argument, the court said that Unison’s case had focussed almost exclusively on discrimination against women and so it would only consider issues of sex discrimination. It said, however, that if the sex discrimination claim did not succeed it was unlikely that a claim based on any other protected characteristic would do so. The court held that the fee scheme was seeking to achieve three distinct objectives: to transfer some of the annual cost of running  employment tribunals to the users who benefit from it and can afford it; to make tribunals more efficient and effective, not least by removing unmeritorious claims; and to encourage alternative methods of employment dispute resolution. The court found that each of these objectives is legitimate and that the scheme, taken overall, was justified and proportionate to any discriminatory effect. It was therefore not indirectly discriminatory.

Unison has announced that it has been given permission to appeal the High Court’s decision and that it intends to do so.  For now, it seems likely that the number of claims brought by employees against employers will continue to fall well short of the numbers which were brought pre-fees.  This is likely to be welcome news for employers. However, it does continue to raise questions in respect of access to justice for those employees who do have meritorious claims. It remains to be seen whether, on appeal, Unison will be able to persuade the court to find differently. In the meantime, it may be beaten to the post by the general election. If there is a change in the political landscape reforms to the fees system seem likely in any event.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/challenge-to-employment-tribunal-fees-fails/

Early conciliation: what does it mean for employers?

Gurpreet Duhra, partner in our Sheffield office comments: Early conciliation (EC) has been available to claimants since 6 April 2014 but will be mandatory in respect of claims presented on or after 6 May 2014. Whilst employers could be forgiven for assuming that EC will have limited impact, particularly given the significant decline in claims since the introduction of fees, it is important that managers are prepared for the initial call from Acas to avoid prejudicing the employer’s position in any subsequent negotiations or litigation.

The mandatory EC procedure involves four steps:

Step 1: A prospective claimant who wants to institute relevant proceedings must provide prescribed information to Acas either by completing the EC form online or by telephoning Acas.

Step 2: An early conciliation support officer (ECSO) will make initial contact with the prospective claimant. The ECSO will explain the EC process, take some details from the prospective claimant and check that they wish to proceed with conciliation. As long as they do, the prospective claimant’s information will be sent to a Concilation Officer (CO).

Step 3: The CO will then contact the prospective respondent and enquire whether the prospective respondent is willing to participate in EC. If so, the CO must try to promote a settlement between the parties within the EC period of one calendar month from the date on which the prospective claimant made initial contact with Acas. The EC period may be extended once, by up to 14 days, if the CO believes settlement may be imminent.

An EC certificate must be issued where:

  • It is not possible to contact the parties;
  • The parties do not wish to participate in EC;
  • Settlement is not achieved within the prescribed period; or
  • The CO considers that settlement is not possible.  

The EC certificate will give the prospective claimant a unique reference number which they will have to include on their ET1 should they go on to present a claim. Without that reference number, the tribunal will reject the claim (except in the minority of cases where EC is not required).

What is the impact on employers?

There is no requirement on either party to engage with conciliation. If either the claimant or the respondent does not want to enter into discussions, the CO will simply issue the EC certificate. In many cases employers may consider that there is little incentive to enter into settlement negotiations until the employee has paid a fee to institute tribunal proceedings. However, there are potential benefits of settling a claim early, particularly where the claimant is unrepresented.

Employers should bear in mind the following considerations:

Do managers need training? A line manager may be the first contact that Acas makes with the employer. It is vital that anyone within the organisation who is contacted by Acas about an employment dispute understands the importance of dealing with the initial contact properly. The informal approach from Acas should be treated as seriously as employers would take a formal legal communication regarding a potential claim. Ensure that any managers who may be the initial recipient of the Acas call are aware of their responsibilities.  The initial recipient of the call should also be reminded to keep the issue confidential and not to discuss the details of the dispute with anyone else;

Give managers clear guidance on who will deal with EC. It is important that the individual who receives first contact from Acas about EC passes the details of the dispute on to whoever has responsibility for managing any subsequent tribunal claim. Individuals without appropriate authority and training should not attempt to resolve the issue themselves. Acas is allowing some larger organisations to register a national contact for the purposes of EC. For more information contact ECcontactsList@acas.org.uk;

Do not discount the option of settlement without first considering the merits. An unreasonable rejection of the possibility of settlement discussions could potentially lead to cost implications in the future. Relevant factors when assessing the merits of conciliation include: the likely strength and value of the claim; the potential legal costs and management time of defending a claim; the ease with which the issue could be resolved informally; and any damage to the organisation’s reputation that could result from lengthy and public tribunal proceedings;

Obtain as much information on the allegations from Acas as possible to make an informed assessment of whether the claim has any merits. Early investigation of the background to the allegations will also assist the organisation to respond comprehensively and accurately if the claimant does put in an ET1; 

Do not feel that you have to respond to all allegations immediately. Take time to consider your position before responding on allegations made and if necessary take legal advice on next steps including:

  • How to obtain further information on the allegations to allow you to determine the merits of any potential case;
  • The timing of any settlement and whether settlement is appropriate before a claim has been issued. As a result of the new fee regime, claimants are likely to want to explore settlement before issuing a claim whereas respondents are more likely to favour a ‘wait and see’ approach in order to see if a claimant is serious enough about their case to ‘put their money where their mouth is’. However, early settlements can be cheaper for employers and positions may become more entrenched once the fee has been paid;
  • The terms and nature of any settlement package offered.

Mark any internal correspondence regarding potential settlement as “without prejudice” to try and avoid it being disclosable in any future tribunal proceedings. Anything communicated to an Acas officer in connection with the performance of their functions is not admissible in evidence in tribunal proceedings unless the person who communicated it to the officer gives their consent.

Ensure that no one in the organisation reacts to contact from Acas by taking negative action against the worker(s) or employee(s) concerned eg refusing to give a reference. Depending on the type of allegations raised, this could lead to further claims (e.g. victimisation or whistleblowing).

Calculate the time limit: the EC regime includes a complicated process for recalculating the time limit for presenting the claim. The time limit is extended by the period between ‘Day A’ when the claimant contacts Acas, and ‘Day B’ when the EC certificate is deemed to have been issued, but may be extended further if this results in there being less than a month between Day B and the time limit expiring. There is significant potential for error and if the claimant fails to present the claim in time, the employer may be able to challenge its acceptance by the tribunal.

Ultimately in many cases employers may consider that there is little value in engaging in early conciliation. However, following the guidelines outlined above may prevent that decision from backfiring and creating increased legal risk for the employer.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/early-conciliation-what-does-it-mean-for-employers/

December 2013’s review of the year

Sandra Wallace, Partner and Employment group head, highlights the most important legislative and case law developments from 2013 and identifies the key cases to watch out for in 2014.   Remember to use our On the horizon legislation tracker to keep up to date with the further changes to legislation which are expected in 2014 and beyond.

 

2013 LEGISLATION ROUND UP

Employment Tribunals

1 February Cap on a week’s pay for statutory awards increased from £430 to £450
  Unfair dismissal compensatory award increased from £72,300 to £74,200
25 June In political affiliation cases the two year unfair dismissal qualifying period no longer applies
29 July One year cap on unfair dismissal compensatory award introduced
  Protection of settlement negotiations from admissibility in unfair dismissal tribunal proceedings introduced
  Introduction of fees regime for employment tribunal claims and new tribunal rules
  Compromise agreements renamed ‘settlement agreements’
7 October New fee remission system in force for employment tribunal fees

Family friendly

8 March Parental leave increased from 13 to 18 weeks
7  April Statutory maternity, paternity and adoption pay rates increased from £135.45 to £136.78 per week

Whistleblowing

25 June Amendments to whistleblowing legislation to remove good faith requirement and introduce public interest test
1 November

Close of call for evidence on further whistleblowing reform

Redundancy

1 February Cap on a week’s pay for statutory redundancy payments increased from £430 to £450
6 April Period of required collective consultation for 100+ redundancies reduced from 90 to 45 days

Employment status

1 September Employee shareholder status introduced

Discrimination

25 June Obligation for the Government to make an order outlawing caste discrimination came into force
1 October Repeal of third party harassment provisions from Equality Act 2010

 

 

2013 CASE LAW ROUNDUP

 Redundancy

USDAW and others v WW Realisation 1 Ltd and others This case involves the redundancy consultation obligations arising out of the closure of Woolworths and Ethel Austin stores between 2008 and 2010.   The EAT ruled that the words “at one establishment” in the UK’s collective redundancy legislation should be disregarded for the purposes of any collective redundancy involving 20 or more employees. This potentially results in employers needing to collectively consult whenever they propose to make 20 or more redundancies in a 90 day period, regardless of where the employees are based.  This case is however being appealed to the Court of Appeal.

Working time

Neal v Freightliner Ltd

 

An Employment Tribunal held that a freight worker was entitled to have overtime payments and shift premiums included in the calculation of his holiday pay as they were intrinsically linked to the performance of the tasks he was required to carry out under his employment contract.  This case is being appealed to the EAT.

Employee competition

Coppage and anor v Safety Net Security Ltd The Court of Appeal upheld an order that a former company director pay at least £50,000 following a breach of his post-termination restrictive covenants which prohibited solicitation of any customers of his former employer for a period of six months following termination.
Vestergaard Frandsen SA v Bestnet Europe Ltd The Supreme Court held that a former sales manager was not liable for misuse of confidential information.  The manager had not acquired information while working for Vestergaard and had no implied knowledge of the misuse of information by her new employer.

Transfer of undertakings

Alemo-Herron and others v Parkwood Leisure Ltd

Considering the status of collective agreements following a TUPE transfer, the ECJ decided that under the Acquired Rights Directive it is impermissible for UK courts to adopt a “dynamic” rather than a “static” interpretation.  Where transferring employees’ contracts provide that their terms are to be determined in accordance with collective agreements, the transferee cannot be bound by terms which are collectively agreed after the transfer if it is unable to be involved in the negotiating process.

Crystal Palace FC Ltd v Kavanagh & Ors

In a case which arose out of the dismissal of employees of the company which owned Crystal Palace football club when it went into administration, the Court of Appeal held that the employees were dismissed by the administrator shortly before the business was sold for a valid “economic, technical or organisational reason”. The administrators needed to reduce the wage bill in order to continue running the business and avoid liquidation.

Discrimination

Lockwood v Department of Work and Pensions

The Court of Appeal held that a severance scheme, which paid higher payments to older employees on the basis that they needed more of a cushion than younger employees, was objectively justified.

Cox v Essex County Fire and Rescue Service

In this disability discrimination case, the EAT decided that although the employee had advised that he was suffering from bipolar disorder, the absence of a definite diagnosis meant that the employer did not know, and could not have reasonably been expected to know, that the employee was disabled.

Croft Vest Ltd & Ors v Butcher

The EAT held that an employer who refused to pay for an employee with work-related stress and depression to have private psychiatric counselling and cognitive behavioural therapy breached its duty to make reasonable adjustments.

KEY CASES FOR 2014

 Redundancy

USDAW v Ethel Austin Ltd (in administration) and another case

 

The Court of Appeal will consider whether the words “at one establishment” in the UK’s collective redundancy legislation should be disregarded for the purposes of any collective redundancy involving 20 or more employees. (NB. this is the Woolworths case  – see above for EAT decision).
Lyttle and others v Bluebird UK Bidco 2 Ltd In an application from a Northern Ireland employment tribunal to the ECJ, clarification is sought as to the meaning in the UK’s collective redundancy legislation of the term “establishment” and whether the duty to collectively consult is triggered when 20 or more employees are dismissed at a particular establishment or across the whole of the employer’s business.

Working time

Lock v British Gas Trading Limited and others The ECJ will consider whether the holiday pay of a worker, who receives basic pay and sales-related commission, should be more than just basic pay, even though during holiday periods they are not undertaking work that would entitle them to commission.
Neal v Freightliner Following the Employment Tribunal in 2013 (see above), the EAT will consider if holiday pay must be calculated in a way which takes account of pay for voluntary overtime.

Discrimination

Z v A Government Department & the Board of Management of a Community School;    CD v ST There are currently two cases before the ECJ which will consider whether an mother who has a child via a surrogacy arrangement has pregnancy and maternity rights under EU law.
FOA on behalf of Karsten Kaltoft v Billund Kommune The ECJ will consider whether discrimination on grounds of obesity is prohibited by EU discrimination law.

Gallop v Newport City Council

 

Judgment is awaited in this case in which the Court of Appeal has considered if an employer’s lack of knowledge prevents the duty to make reasonable adjustments arising where the employer relied on advice from an occupational health adviser that an employee was not disabled for discrimination purposes.

Mba v Mayor and Burgesses of the London Borough of Merton

Judgment is awaited in this case in which the Court of Appeal has considered whether or not an employer’s requirement that all care workers work some Sunday shifts indirectly discriminated against a Christian residential care worker who strongly believed that Sunday should be a day of rest.

Employment law reforms

R (on the application of UNISON) v Lord Chancellor

 

Judgment is awaited in this case in which the High Court heard an application by UNISON claiming that the introduction of employment tribunal fees is in breach of EU law and contrary to the principle of access to justice.    A similar application to the Scottish Court of Session has been stayed pending the outcome of the High Court case.

R (on the application of Compromise Agreements Ltd) v Secretary of State for Business, Innovation and Skills

An application has been made for judicial review of the statutory cap of one year’s salary in unfair dismissal cases. The application is based on the premise that older people are more likely to be out of work for more than a year and therefore would be eligible to more than a year’s compensation were it not for the new cap.

Permanent link to this article: http://www.dlapiperbeaware.co.uk/december-2013s-review-of-the-year/