As you may have heard in the news, last month the Supreme Court decided that the current laws in place regarding Employment Tribunal fees were not justified and so should therefore be quashed. This blog post will explore what happened, the reasons behind the ruling and what it means for employers.
A quick case overview
On 26 July, the Supreme Court ruled in R (on the application of Unison) v Lord Chancellor that the Government’s Employment Tribunal fees regime that was introduced in 2013 “prevents access to justice and is therefore unlawful”. It also found the scheme to be “indirectly discriminatory” to women.
In court, Unison argued that the Lord Chancellor’s decision to introduce the fees back in 2013 was an unlawful exercise of his power because the fees:
• Interfere unjustifiably with the right of access to justice under both UK common law and EU law
• Frustrate the operation of legislation granting employment rights
• Discriminate against women and other groups with protected characteristics under the Equality Act 2010.
The Supreme Court unanimously allowed the appeal on these grounds.
Lord Reed, who gave the lead judgement, said that the question of whether Employment Tribunal fees effectively prevent access to justice should be decided on their impact in the “real world”. He continued to say that where households on low to middle incomes could only afford the fees by forgoing acceptable living standards, then the fees could not be regarded as affordable. Even where the fees are affordable, they prevent access to justice if they make bringing the claim “futile or irrational”. For example, no sensible claimant would bring forward a claim for a modest award unless they were “virtually certain” of success, recovery of fees and the full payment of the award.
Lady Hale, who gave the judgement on the discrimination issue, set out the statistics that showed the highest level of fees, which are for type B claims (including discrimination cases), were proportionally bought forward by more women than men. Unison claimed that 54% of type B claimants were women, whereas only 37% of type A (for cases such as unlawful deductions from wages), were women, showing how women are put at more of a disadvantage. Lady Hale did not accept that charging some claims a higher fee had been effective in achieving the stated aim of transferring the cost of the Tribunal service from taxpayers to users.
What does this mean for employers?
Since the ruling, fears have been raised by businesses, mediators and the Courts that they could be facing a lot more cases, irrespective of employment practices. Although the decision has been widely praised by the general public and employees, there is now the additional worry for employers and the legal system that a greater burden could be put on them as a result of the process of bringing forward a claim being made easier.
Peter Swabey, Policy and Research Director at Institute of Chartered Secretaries and Administrators (ICSA) said; “This is undoubtedly a good decision from the viewpoint of workers’ rights, but it is important to balance access to justice against the cost to business of defending against frivolous claims”.
Ministry of Justice data from January 2017 revealed that the proportion of successful cases being brought before the Tribunal was lower than before the fees were introduced, however these figures are now expected to rise. Cases that employers thought could be settled internally with mediators, could now be taken forward as employees think they could stand more to gain. We have also been warned that disputes employers thought had been concluded and closed could be resurrected if they were within the legal time limits or the employee could gain a time extension.
What should you be doing to minimise risk?
Obviously, you should always have your employee procedures and employment policies in good order, however this is more important than ever now.
If you have sound policies and procedures in place, are complying with them, are consistent with your approach and get advice before making any decisions to dismiss, then the new ruling should not impact on you. Rachel Suff, employment relations adviser at the Charted Institute of Personnel and Development (CIPD) has said that good management policies could also reduce the risk of conflict going before a Tribunal. She has said; “The ideal approach advocated by the CIPD – regardless of fees – is to promote the use of informal conflict resolution methods like mediation, to help nip potential conflict in the bud. If a case does proceed to Tribunal, relationships are likely to have broken down beyond repair so it is essential that organisations have in place good people management policies and practices, and nurture healthy working relationships.”
If you do receive a claim, get in touch as quick as possible.
For more advice contact us on 01582 883299 or email email@example.com.