Supreme Court rules tribunal fees are unlawful

On 26 July 2017, one of the most important judgments in the past 50 years of employment law was handed down. Yes, in an age of gloomy economic forecasts and disgruntlement in the workplace from squeezed workers, news reached us last Wednesday that restored our faith in the justice system.

The Supreme Court in R (on the application of Unison) v Lord Chancellor declared that employment tribunal and EAT fees are unlawful under both domestic and EU law. The Court’s view is that the Fees Order that introduced the fees was unlawful from the outset and must be quashed because it has the effect of preventing access to the tribunal system. Well, this is what critics of the fees have been saying since their introduction and they no doubt did a double take after the judgement. Fake news? Nope, a sensible ruling on the backdrop of research that revealed a 70% drop in the number of cases brought in the employment tribunal, since the fees were introduced.

It was Unison who waged a four year legal battle to get the fees scrapped, arguing that they prevented workers from seeking justice and were discriminatory towards women. To those who say trade unions are for bygone eras, think again!

The Supreme Court unanimously decided against the Government and found it was acting unconstitutionally when it introduced the fees. The immediate consequence of this decision is that the Fees Order is quashed meaning that tribunal and EAT fees cease to be payable and fees paid in the past must be reimbursed.

The fees were introduced under the Employment Tribunals and Employment Appeal Tribunal Fees Order on 29 July 2013, by the then Lord Chancellor Chris Grayling, in a bid to reduce costs and free up clogged courts. Under this Order, employment tribunal claimants and EAT appellants were liable to pay a fee of up to £1200 in order to bring and pursue claims and appeals, unless they qualified for fee remission on the basis of their disposable capital and gross monthly income.

In the main judgment, the Supreme Court noted that there is a difference between the level of the fees in the tribunal and those fees in the small claims court, where it is much cheaper to bring a small value claim. In addition Baroness Hale concluded that it was indirectly discriminatory to charge higher fees for type “B” claims (which include discrimination claims) than type “A” claims.

So what will happen next?

Firstly, this is a fantastic result for Claimants as it means individuals who have been treated badly by their law-breaking bosses can now take action without worrying about whether they can afford to finance a claim at the Employment Tribunal. However, it is unlikely the fees regime will disappear for good. It is possible the Government will bring in reduced fees under a new regime.

In a further victory for those who had to pay fees since 2013 the Supreme Court has confirmed that they will need to be refunded (approx £32 million). The immediate impact can already be seen as it is understood that employment tribunals are now refusing to take fee payments when hard copies of ET1 claim forms are presented in person.

Unfortunately, we will never know exactly how many people missed out or were put off taking action against their employers for unlawful actions in the workplace. However, it seems that the principles of fair access to justice have prevailed and this case is a significant step in the right direction towards balancing employer-employee rights in the workplace.

Kamran Sadiq - Solicitor

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Future world of work and rights of workers inquiry

The Business, Energy and Industrial Strategy Committee has launched an inquiry into the ‘future world of work’ and in particular, the 'gig economy' – agency workers, zero-hours work, the use of ‘self-employment’, worker status, low pay and poor working conditions. They refer to the recent Sports Direct scandal and also other organisations with similar poor working conditions.

This is good news. Hopefully, whatever its outcome, turning the lamp onto these types of employers can bring some heat on these organisations with more public attention drawn to the growth of the ‘precariat’ – individuals who work in poor conditions with weak terms and conditions, be it low pay, the absence of paid holiday, sick pay and the like.

My view is that the rise of the ‘precariat’ is nothing new – this country has a history of shoddy employers treating working people poorly and of governments legislating to either counter this, with increased protections (the introduction of redundancy pay in the 1960s, unfair dismissal in the 1970s and the recent(ish) minimum wage in the 1990s) or to aid it, by reducing employment rights (the scrapping of wages councils, the introduction of ET fees of up to £1,200, limits on compensation – all within the last 3-4 years). Since 2010, the move has been to reduce employment protection and to restrict trade unions. My view is that this has encouraged shoddy employers and weakened the position of employees.

Evidence suggests that as a result of the reduction in protections, the equal pay gap is now growing and certain sectors of the workforce, such as disabled people and pregnant women or women on maternity leave, are suffering more, not less, discrimination. I also believe that it has encouraged the growth of the ‘gig economy’ – individuals working in sham ‘self-employment’ situations or in weak zero-hours roles with little control or say about the number of hours they work. This causes illness, harms the economy and damages lives, not least children of adults who work for low pay, on horrendous hours and with uncertain futures.

I’m pleased that the Committee have this on the agenda. Let’s hope for all concerned, not least our children and grand-children, that whatever recommendations are made, they are followed by those in power and a more secure workforce results with more (not less) permanent, well-paid jobs. After all, apart from shoddy employers and obscenely profitable multinationals, how do we as a nation benefit from the rise of the precariat?

The Committee is seeking comments – please do so at:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-energy-industrial-strategy/news-parliament-2015/the-future-world-of-work-and-rights-of-workers-launch-16-17

David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

The EU debate - discrimination

In this blog I want to look at the legal effect of EU membership from the perspective of discrimination law.

I begin by quoting (again – I hope he does not mind) from the advice of Michael Ford QC to the TUC* on this subject:

“It is difficult to overstate the significance of EU law in protecting against sex discrimination.“

I am (again) deliberately trying to avoid a political take on this stuff. I think Ford’s point would be accepted without significant qualification by perhaps 80-90% of employment lawyers.

Why is that? Here are a few concrete examples of legal changes that arose directly out of EU legislation/caselaw:

• Protection from discrimination on the grounds of sexual orientation. Until 2003 this was not a protected characteristic (like sex, race and disability). The Regulations that made it so came about in consequence of the EU Framework Directive.

• Pregnancy protection: the European courts decided that it was not open to an employer to argue that it could justify discrimination against a pregnant woman by saying “we would have treated a man off with sickness the same way” – they ruled that pregnancy is (rather obviously) a female-specific condition – so that no comparison was necessary. Without that ruling protection from pregnancy discrimination would be hugely undermined.

• In the Equal Pay sphere the ECJ extended the concept of pay to pensions – so that part time workers were successfully able to claim equality of terms on the pensions front (and since most part timers are women…

• The ECJ has opened the way to claims of “associative discrimination” e.g. you must not discriminate against A, on the basis of A’s child’s disability (even if A is not disabled).

• Compensation: the European requirement for proper compensation for discrimination made it so that the UK now allows unlimited compensation for victims of discrimination (it is plain that imposing a cap is on the agenda in the event of a Leave vote).

None of this is controversial stuff. Links to the cases and Regulations that support these conclusions are all in the advice to which I link below.

Of course, none of this means you must vote any particular way. My aim is simply to shed some factual light on just a small part of a subject that seems littered at present with half-truths and hyperbole.

* https://www.tuc.org.uk/sites/default/files/Brexit%20Legal%20Opinion.pdf

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Mind the Gap – Gender pay reporting rules

The government has published in draft The Equality Act (Gender Pay Gap information) Regulations 2016. These set out the framework for the new gender pay reporting requirements.

So who will this impact?

The reporting obligation will apply to private, voluntary and public sector employers in the UK with at least 250 employees.

What are the requirements?

Employers will be required to publish the following information:-

1. The overall mean and median gender pay gap across their workforce, using an hourly pay rate for each relevant employee. “Pay” for these purposes is defined broadly and includes basic pay, paid leave, maternity pay, sick pay and most allowances such as car allowances, shift premium pay and bonuses. However overtime, the value of salary sacrifice schemes and benefits in kind will not be included as part of the calculation.
2. The difference between the mean bonus payments made to men and women. The number of men and women in each quartile of the employer’s pay distribution. This is intended to illustrate whether female employees are concentrated in a particular way in terms of their remuneration, which would potentially indicate impediments to career progression.
3. Employers will have the option to publish a narrative to accompany the pay gap information.

Where is the information to be published?

The information must be published on a searchable UK website that is accessible to employees and the public and then maintained for at least three years to allow progress to be tracked. The information must also be uploaded to a government website.

Is there to be any ‘penalty’ for non-compliance?

The plan to introduce a civil penalty in the form of a fine has been replaced with a focus on ‘naming and shaming’ the employers who fail to comply. There is no specific penalty for non-compliance at the moment but this will be kept under review.

So what happens next?

The draft regulations are subject to a consultation that will close on 11 March 2016. The draft regulations are scheduled to take effect on 1 October 2016. Employers will be required to prepare a preliminary data snapshot showing the gender pay position as at 30 April 2017 and the detailed pay information must then be calculated and published on a date of the employer’s choosing but by April 2018 at the latest.

It will be interesting to see how the implementation of the Regulations is carried out, if the website will be up and running on time, and also how many Employers will actually feel threatened enough by the “naming and shaming” to even comply with the Regulations.

Samantha Simpson - Trainee Solicitor

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Trade Union Bill

The much publicised Trade Union Bill will not have escaped anyone’s attention. The government (ahead of more drastic cuts to public sectors which we know are coming) are seeking to greatly reduce trade unions’ ability to organise industrial action – and in the case of ‘important’ public services, effectively remove it.

Under the Bill, for a ballot on industrial action to be legal there must be a 50% turnout of all members. So an abstention will now be equivalent to a ‘no vote’. Further, if you work in health services, education, fire services, transport services, nuclear decommissioning and border security, a ballot on industrial action may well require 40% of those balloted to vote in favour of the action for it to be deemed lawful. Let’s look at the reality of this. 1,000 members are balloted regarding industrial action. 500 members vote – the first hurdle is passed. However, of the 1,000 members who were balloted, 400 (40%) must vote in favour of the industrial action. Therefore, out of the 500 members who voted, for industrial action to be lawful, 400 must vote in favour of it. That is 80% of the voters! Let us not forget that the current government who are bringing through this Bill won only 36% of the votes cast, representing less than 25% of the votes of eligible voters.  They would not be in power, by a shortfall of some 15%, under the test they now seek to apply.

Unfortunately the ideological attack doesn’t stop there. The government will have the power to limit the amount of facility time spent by trade unions in public services, thereby directly limiting the union’s ability to represent their members and assist them in enforcing their statutory rights – clearly, restricting employees’ access to justice with swingeing employment tribunal fees didn’t go far enough. As part of the Bill, Trade Unions will also be required to provide annual reports to the Certification Officer (“CO”) with details of all industrial action and the use of political funds. Numerous restrictions and requirements will be implemented regarding picketing, the duration of strike mandates, and information that must be entered on ballot papers, to name but a few. One clear result of these measures will be an increased financial cost to the Trade Unions in carrying out any industrial action. And should they fail to meet any of these new arbitrary hurdles, the CO will have the power to fine them.

The government has also seen fit to change the opt-out requirements regarding the use of political funds. Currently trade union members are balloted providing them with the opportunity to opt-out of part of their subscriptions going towards political funds. Under the Bill, members will instead be required to opt-in to their funds being used in this way, and they must do so every 5 years. It is widely known that opt-in processes reduce participation. The result - a restriction in trade unions’ ability to engage in political debates, and to support the party or parties that support them,  We see no similar restriction on the ability of millionaire hedge-fund managers to donate as they wish, to support the parties that they prefer.

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

60% reduction in Tribunal cases

On Wednesday 29 July 2015 it was the 2 year anniversary of the introduction of Employment Tribunal fees. Not a day for celebration.

Latest statistics from the Ministry of Justice show a 60% reduction in Tribunal cases.

But on a more positive note, on 21 July it was announced that the House of Commons Justice Select Committee will conduct an inquiry into the effects of increased court fees and introduction of tribunal fees. This follows the long awaited announcement in June 2015 that the Ministry of Justice will also review the impact of Employment Tribunal fees.

Could this lead the way to fees being abolished and restoring access to justice?

The MoJ internal review, conducted by civil servants, will gather evidence, data and research on alternative dispute resolution and its impact; volumes and progress of claims including settlements, withdrawals and those that got to a hearing; fee remission data; income from fees; costs incurred in setting up the systems; characteristics of Tribunal users and other evidence. However, it will not take evidence from external bodies and one of the aims is to assess whether the fees regime has successfully transferred costs from the taxpayer to tribunal users. The MoJ will no doubt want to justify its own decision to introduce fees in the first place. 

In contrast and with an emphasis on access to justice, the House of Commons Justice Select Committee, made up of 11 cross-party MP’s, will welcome views from external parties and Tribunal/Court users on any aspect of the subject, but is particularly interested in:

• How the increased Court fees and the introduction of Employment Tribunal fees have affected access to justice and how they have affected the volume and quality of cases brought; and

• How the Court fees regime has affected the competitiveness of the legal services market in England and Wales, particularly in an international context.

Submissions must be made by 30 September 2015.

One need only look at the statistics to see that the introduction of fees is blocking access to justice for those who need it. Sex discrimination claims, for example, fell by almost 80% in the first 12 months after fees were introduced. The total number of claims heard between April 2014 and March 2015 was 61,306; down from 105,803 over the same period in 2013/14 and 191,541 in 2012/13, the last 12-month period before the introduction of fees, according to the figures.

The Justice Select Committee review is therefore welcomed with open arms and we can only hope the findings are positive and properly considered by the Government.

In the meantime, Unison’s judicial review challenge is still progressing in the Courts and was heard most recently in June, with a reserved judgment currently awaited.

Daniel Kindell - Associate Solicitor

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.