Legislation: Employers in the firing line again

A recent Supreme Court ruling has potentially opened the floodgates for employees to bring claims against their employers, explains retail expert Adam Bernstein

The government ruling that introduced fees for anyone wishing to bring an Employment Tribunal claim against their employer was overturned in July by the Supreme Court.

This may mean that employers will face a barrage of tribunal cases in the future as well as claims from previously dismissed staff encouraged to pursue their cases now fees have been removed.

In July 2013, the Government introduced fees for anyone wanting to make a claim or appeal a judgment. The fee to lodge a claim was £160 or £250 (depending on the nature of the claim) and the fee to pursue the matter to a hearing was a further £230 or £950. Employers could be ordered to pay costs if employees won their claim.

According to Chloe Themistocleous, an associate at Eversheds Sutherland (International) LLP, after the introduction of fees, the number of claims being brought fell by 80 per cent. She says: “While a remission system was in place to help the poorest, by reducing or waiving the fees, those who missed out had no choice but to pay the fees or not make a claim. Many simply did not want to take the risk.”

Supreme Court

Trade union Unison decided to challenge the fees, claiming not only that it was unlawful, but that it indirectly discriminated against women.

At the end of July this year, the Supreme Court quashed the fee, judging it to be both unlawful and indirectly discriminatory.

The ruling has a number of implications. Ms Themistocleous explains: “No further fees can be charged by the Employment Tribunal until a replacement scheme is introduced.” This means new claims can now be brought for free again and no hearing fees will be charged claims already lodged.

She adds that the Ministry of Justice has undertaken to reimburse the fees to those who have already paid them. “But what is not yet clear, however, is whether that undertaking extends to compensating employers who have been ordered by tribunals to reimburse fees paid by claimants when their claims have been successful.”

Without the deterrent effect of fees, employers now face an increased risk of employment-related claims from current and former staff. Worryingly, Ms Themistocleous says it is also possible that some individuals might now try to claim they should be permitted to bring out-of-time claims in respect of past alleged breaches of their rights.

Protect your business

Ms Themistocleous warns that tribunal claims are always a risk, even for the most responsible employers. However, she advises there are some simple steps that can be taken to avoid claims being made and to minimise the risks if claims are made.

“It’s important to ensure that: all employees have up-to-date contracts; there are clear and accessible policies dealing with discipline, absence and grievances that managers must follow; managers are trained on recognising discrimination in the workplace; accurate records of all meetings and telephone calls are kept.”

Ms Themistocleous says it is vital to act quickly on notification of a claim, as employers only have 28 days to submit a response. “Missing this deadline can lead to judgment being entered automatically in favour of the claimant.”

In many cases, the claim form will be accompanied by a list of case management orders and a hearing date. Her advice is to diarise key dates, as missing one could lead to the response being struck out or the business being fined up to £1,000.

It is worth considering who will attend the tribunal as a witness on behalf of the company as soon as possible. Make sure they are free to attend.

It is also important to check the claim form was submitted in time – within three months from the date of dismissal or discriminatory act – taking into considering any additional time permitted if ACAS is involved. If the claim is out of time, it may be possible to get it thrown out.

It is a lot easier to address any issues at the time they occur rather than later. If in doubt, take advice before committing to any action.