MP's briefing about Employment Tribunal fees

Well, I know we’ve banged the drum many times about ET fees but I think a recent briefing for MP's is worth a mention. The report is located at:

http://researchbriefings.files.parliament.uk/documents/SN07081/SN07081.pdf.

In a nutshell, the report confirms that:

• ET claims had been in a long-term decline before ET fees were introduced in July 2013; they rose at the height of recession in 2009/2010 but were declining again three to four years before ET fees were introduced

• Claims dropped by 67-69% after ET fees were introduced

• Fee remission (whereby a person can have the ET fees reduced in full or part, for example because they have a low income) was only applied for in 1/3^rd of ET claims (for issue fees) and of those applications, it was only granted in 39% of applications. This shows that the majority of Claimants have to pay full ET fees of as much as £1,200.00.

This again illustrates the drastic impact of ET fees on access to justice. It also reiterates our previous concern about the need for ET fees in the first place; with falling ET numbers, what rational basis was there for implementation?

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.

Should Overtime Be Accounted For In My Holiday Pay?

In anticipation of the Employment Appeal Tribunal’s (“EAT”) imminent decision in the holiday pay cases of Bear Scotland Limited v Fulton & Baxter, Hertel (UK) Limited v Wood & Others and Amec Group v Law & Others, regarding whether voluntary overtime must be taken into account when calculating holiday pay, we thought it appropriate to provide an overview of the legal issues in the case. To assist we will first look at the way holiday pay is currently calculated.

Under the Working Time Regulations 1998 (“The Regulations”) workers are currently entitled to a minimum of 5.6 weeks’ paid holiday each year (inclusive of bank holidays). The first 4 weeks of this are required by the Working Time Directive (“The Directive”). The additional 1.6 weeks are solely provided under the Regulations. The way employers calculate holiday pay varies; however, it is widespread practice not to include voluntary overtime in such calculations. The result is that workers who regularly work voluntary overtime are placed at a disadvantage when taking holiday because they receive less pay than they would if they were not on holiday (and working voluntary overtime). Following recent decisions by the European Court of Justice in Williams and others v British Airways and Lock v British Gas Trading, the question has arisen as to whether such practice is in line with the intentions of current legislation.

In the Bear Scotland v Futon & Baxter appeal, the Tribunal ruled that voluntary overtime must be included in the calculation of holiday pay for the entire 5.6 weeks of holiday provided for under the Regulations. By contrast, in the Hertel (UK) Limited v Wood & Others and Amec Group v Law & Others appeals, the Tribunal ruled that voluntary overtime should be included in holiday pay calculations, but only for the 4 weeks required by the Directive – not the 5.6 weeks provided for under the Regulations.

We would hope that the EAT reject all of the appeals and rule that voluntary overtime must be included in holiday pay calculations. Further, we would hope that the EAT confirm that it should be included for the full 5.6 weeks provided for under the Regulations. In our opinion, any other decision would clearly act as a disincentive to taking holiday for those workers who regularly work voluntary overtime. It is the writer’s opinion that if the EAT confirms that overtime is to be included in holiday pay, it is more likely that it will just be for the 4 weeks required by the directive.

If the EAT confirms that voluntary overtime must be included in the calculation of holiday pay (either for 4 weeks of 5.6 weeks) we would envisage many claims, for unlawful deductions from wages, being commenced in the Employment Tribunals by workers who have not had overtime accounted for in their holiday pay.

If you regularly work overtime (or receive regular pay from your employer that is not part of your ‘basic pay’ e.g. commission, bonuses, shift allowances etc.) and such pay is not accounted for in your holiday pay we would advise you to contact our Employment Right’s Department to seek advice. There are short time limits within which these claims can be commenced so do not delay in contacting us – if you do, you may lose your opportunity. All enquiries should be directed to holiday@morrishsolicitors.com

Tony Ridley

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

Regulation, Regulation, Regulation!

The Government is very worked up at present about regulation. 

 

I dislike red tape.  I think it is laudable that we should seek to regulate sensibly and proportionately. 

 

But there’s not a lot of joined-up thinking going on. 

 

So, in the midst of a set of Employment Law and Tribunal reforms that unashamedly aim to reduce the number of people bringing claims in respect of their employment rights to Tribunals, we see some bizarre anomalies:

 

• On 29^th July the Employment Tribunal fee regime begins – we have blogged about it before, but now we are getting to grips with the detail of what the scheme will mean in practice.  The rules and regulations are, in short, a nightmare.  You may have to pay a fee.  You may be exempt from fees.  You may have disposable monthly income at a level that means you get partial remission from fees.  You will have to complete endless forms and supply endless evidence to show just where your disposable monthly income falls.  The public will be confused.  Lawyers will ask, “who will pay us to fill in these new forms?”

 

And if a Claimant gets it wrong, chances are they might lose altogether their chance to enforce the rights that successive Governments have been so keen to trumpet on their behalf.

 

• To our astonishment, the Government is pushing ahead with the idea of “selling” your employment rights in exchange for shares on the commencement of employment.  The devil is again in the detail – the hoops through which employer and employee will need to jump, to qualify under the new scheme, are an exercise in how not to do red tape and regulation.  As a matter of principle, it can’t be right that you might have to sell your rights to get employment.  But in practice we tend to think that very few people are going to bother – it is more trouble than it is worth.

• Also from 29^th July we have a complete overhaul of the Employment Tribunal rules of procedure.  Not more regulation, necessarily, but certainly a sea change to existing regulation – and the two are pretty much the same thing.  Time to learn a new set of rules and procedures.

 

None of these changes were necessary.  In our view none of them are desirable.  All of them add directly and/or indirectly to the burden of red tape both as it affects individuals and as it affects businesses. 

 

Here we see the law in practice – and in this case, it is the law of unintended consequences.

 

Paul Scholey - Partner

 

For further information on Employment Rights, please visit our website or call 0033 3344 9600 and ask to speak with our Employment Rights team.

 

 

Health & Safety & The Boer War

The recently enacted Enterprise and Regulatory Reform Act contains a number of disturbing provisions, including the frankly bonkers proposals in relation to share incentives for employees who are prepared to sign away their employment rights. 

 

But hidden away in there, and most disturbing of all perhaps, was Clause 61, a last minute amendment that snuck into the Bill under the auspices of the Government’s clamp down on regulation red tape and compensation and the so-called compensation culture.

 

It is significant to note that:

 

• Clause 61 was never subject to any form of public consultation; and
• It was introduced to the Bill after the Bill had been through its Committee stage in the House of Commons (in effect, it was hardly scrutinised at all).

 

What was the effect of Clause 61? 

 

In terms, it rolled back the statutory Health and Safety framework for civil claims so that now in 2013 an employee injured at work is in essentially the same boat in which he or she would have found themselves in 1897.

 

That’s right, 1897.

 

116 years of progress in Health and Safety has been abolished in an eye blink. 

 

My colleagues who support workers who make claims in respect of work related injuries always say this: our clients have never, ever expressed as great an interest in compensation as they have wished to be free from injury or disease. 

 

And the strides made in the last 20 years in improving safety at work have been enormous.  They have been driven, by and large, by employers who have improved their standards of care at work, in response to claims brought by injured victims – since for many employers the finest incentive to improve good practice at work is a positive impact on the bottom line (i.e. a reduction in insurance premiums relating to workplace claims).

 

The details of the change in the law are dry.  In its broadest sense, it might be said that it will now be substantially more difficult for injured employees to recover compensation for those injuries.

 

Insurance Companies will save money. 

 

But the NHS will not.  Historically we have recovered rehabilitation costs from Insurers; now those costs will be distributed back to the State. 

 

And isn’t the point of insurance after all to try to spread amongst us all the impact of one devastating event upon an individual? 

 

The Government concedes that up to 70,000 claims a year might be adversely affected by their changes to the law. 

 

We were not asked about it.  There is no evidence base for the changes that have been made.  Yet more (see our previous Employment Law Blogs) false claims of “perception of over regulation” are spouted by the coalition. 

 

It’s about time we started to legislate to deal with real problems, rather than “perceptions”.

 

Until we do, more people will suffer without redress, Health & Safety standards will slip, families will be devastated by death and injury – and eventually (since I think sometimes these things go in cycles) someone will have to face front and say that Health & Safety laws are there for a purpose.

 

By then those now in power may be enjoying lucrative consultancy contracts in the Lords.  I wonder who will apologise to the injured and the families of the dead then.

 

Paul Scholey - Partner

 

For further information on Employment Rights, please visit our website or call 0033 3344 9600 and ask to speak with our Employment Rights team.

 

De-regulating employment law, what’s it all about?

Now, we’ve made it clear many times that we have massive concerns not only about the content of the changes to employment law that are coming but also the reasons behind them. It seems that the Government’s own recent research now completely supports our concerns.

 

The Government said we are over-burdened by ‘red tape’ and regulation – yet the current Minister for Employment Relations wrote last week that “the UK...has one of the most lightly regulated labour markets in the world” and ”burdens from employment law (in the UK) are low by international standards”. She confirmed that we are the third least, yes least, regulated major economy, just behind the US and Canada and we have less employment law than every other European economy as well as South Africa, Australia, Russia, Chile, Korea, Brazil, India, China and the list goes on and on. The OECD figures (which the Government agrees with) confirm that we have one third of the employment protection of China and half that of Germany[1]. A previous Government report accepted that UK employment regulation was already in “good shape”[2]. I should make clear that the above research was done before the majority of the Government’s changes are due to take effect just after this Easter.

 

They said we have too many Tribunal claims – the latest ET statistics show new ET claims have dropped 15% on the previous year[3]. Other Government statistics show that in 2011 96% of UK workplaces had no claims made to a Tribunal by any employee; in other words the percentage of workplaces in which an employee made a Tribunal claim was 4%[4]. Further, the Government’s report accepts that Tribunal claims are “relatively rare”.

 

They say that the Tribunal’s compensation is far too high – the most common award for Unfair Dismissal is only £4,560[5].

 

It seems that recently even the Government has accepted the fact that the truth does not support their case for change. Their new tack is to argue that in fact it is the “perception” of business (which they admit “may often be misconceived”) that has “given rise to perceptions that employment law is costly, time-consuming and over-bureaucratic” (this is the Minister again)[6], hence why change is required.

 

But does business really have such a perception? Back to the Government’s own research – this has found that business says “employment regulation was generally considered both necessary and fair” and it concluded that any perception of employment law as burdensome has been worsened by the ‘anti-regulation’ debate (which itself has been heightened by the Government!)[7].

 

So, at best the evidence for change is based on perceptions, which may not really exist and are “often misconceived” - surely a weak basis on which to drive massive Government changes to the law?

[1] Page 11 BIS Employment Law 2013: Progress on reform, March 2013

[2] BIS Employment Regulation Report, September 2012

[3] Employment Tribunal and EAT Statistics for1 April 2011 to 31 March 2012

[4] Page 25 BIS Employment Law 2013: Progress on reform, March 2013

[5] Employment Tribunal and EAT Statistics for 1 April 2011 to 31 March 2012

[6] Page 3 BIS Employment Law 2013: Progress on reform, March 2013

[7] BIS Employment Relations Series 123, Employment Regulation, March 2013


David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights Team.

 

“Unnecessary Burdens” in the Equality Act?

BIS has published the “Fifth Statement of New Regulations” setting out the timetable for a number of measures which will be implemented in 2013.

 

This will include “removing unnecessary burdens from the Equality Act”, which specifically means removing employers’ potential liability for harassment by a third party and removing the statutory questionnaire procedure. These changes will be implemented in March 2013.

 

The report openly acknowledges that the ‘new culture’ (which presumably means the ‘red tape challenge’) “has resulted in real benefits to businesses”. Well it certainly is of no benefit to workers!

 

This government is eroding employment rights at an unprecedented pace. It has recently announced that it will be halving the consultation period for collective redundancies (of 100 or more employees) from 90 days to 45 days, making it easier to sack employees. It has already changed the required period of service to be able to claim unfair dismissal from 1 year to 2 years, again making it easier to sack people.

 

It has also announced that it intends to proceed with the ridiculous proposal of ‘employee ownership’, despite 92% of responses to its own consultation expressing concerns about the plans.

 

Fortunately, discrimination law is one area that cannot as easily be hit, as most rights are obtained from Europe, but sure enough where rights can be reduced without being in breach of EU requirements, they are being.

 

These two changes will make pursuing a claim more complicated and difficult, meaning ultimately that wronged employees will be put off pursuing a claim.

 

In particular, the removal of the questionnaire procedure will make it even more difficult to prove equal pay cases and indirect discrimination claims, as the questionnaire process was invaluable in obtaining essential information about company statistics and comparators. The government has said that employees will still be able to ask questions in correspondence, but without the threat of an inference of discrimination if there is a failure to reply, how many employers are likely to voluntarily give the requested information? Not many!

 

Toni Haynes - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

Reduction in response time to government consultations

We often, as a firm, voice our collective opinion on government proposals. In recent years, we have spoken out on a number of issues, ranging from the implementation of a cap on trainee solicitors’ wages, to the Jackson Reforms in the field of Personal Injury law and the now imminent introduction of fees in the Employment Tribunals.

We therefore speak from years of experience when we say that clear and considered responses to consultations require a great deal of research and preparation, which can often take several months.

We were therefore alarmed to hear in recent weeks that the government has now introduced new guidance to shorten the twelve week period for which ministers were previously required to consult the public on government proposals to a mere two weeks.

This clearly will make it extremely difficult for interested parties to gather evidence and prepare a reasoned and informed response to policy changes that directly affect us all.

The upshot of this is that, potentially, sections of the public, in particular those with access to fewer resources who will no doubt struggle to meet the two week deadline, will essentially be left without a voice to challenge government policy.

This appears to us to be nothing more than an attempt by the government to suppress opposition.

To place the effect of reducing the consultation period into context, in their response to the reduction of consultation periods the Institute of Employment Rights cite the Enterprise and Regulatory Reform Bill as an example whereby the government introduced, in their words, a “technical amendment” to existing legislation, without consulting the public. This “technical amendment” was to section 47 of the Health and Safety at Work Act 1974, the significance of which is far-reaching as it overturns the law imposing employers’ strict liability for the health and safety of their employees, which has been in effect for 114 years.

The implications of this are that various existing personal injury clients of our firm who suffer from life-long, incapacitating injuries, including one client who lost an eye, and potentially a career, due to faulty work equipment, would in future have been prevented from bringing their claims against their employer.

We therefore share the view of the Institute of Employment Rights and have supported their ongoing petition to the Secondary Legislation Scrutiny Committee to voice our opposition to the government’s blatant attempt to stifle the voice of opposition.

Christopher Ridley - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

No credible non-political basis for the Government's changes to employment law

 

As lawyers, we can’t help but say: before you change something, look long and hard at the evidence. After all if it isn’t broken, why fix it?

 

What is now amazing us is that the Government’s own evidence indicates there are no sound, solid or non-political reasons for changing the current employment laws we have in this country.

 

For example, according to the BIS Employment Regulation Report for September 2012, UK employment regulation was already in ‘good shape’ before any changes were made.

 

Vince Cable admitted as much in November 2011 when he said, “the UK has one of the most effective and lightly regulated labour markets among developed economies”.

 

The BIS Response to the ‘No Fault Dismissals’ Consultation goes even further than this - identifying that the UK has less employment protection than the BRICS economies – Brazil, Russia, India, China and South Africa – and other developing countries.

 

Yes, that’s right - the Government itself believes we currently have less ‘red tape’ and employment law protection than the world’s fastest growing and newly emerging economies – and that’s before most of the proposed changes – watering down TUPE, bringing in ET fees, scrapping equality questionnaires, removing protection from third party harassment, cutting unfair dismissal compensation by possibly 2/3rds, bringing in ‘employee owner’ contracts etc - come in. Those changes are not expected till 2013.

 

It seems that all external data (largely covering the period before the Government changes began!) support the Government’s evidence:

 

-  Employment Tribunals claims are down 15% nationally.

 

-  The OECD says the UK is already the 3rd least regulated and cheapest labour market (2008) behind only Canada and US.

 

-  The recent World Economic Forum Global Competitiveness Report cited UK’s existing flexibility as to why it moved up from 10th to 8th place in its global rankings.

 

-  The World Bank’s ‘Doing Business’ rankings of 183 countries shows the UK was already 7th in the world in 2011 for ‘ease of operating’ behind only Singapore 1^st, Hong Kong 2^nd, New Zealand 3^rd, USA 4^th, Denmark 5^th and Norway 6^th.

 

So why change things? There seems to be no financial or economic need to do so - and the more the Government changes employment law, the more confused workers and businesses are about their respective rights and obligations - creating more, not less uncertainty.

 

Regardless of this, the Government seems set on a race to the bottom. Many European economies are required to amend employment regulation as part of IMF and European financial support conditions but we seem to be racing to beat them to become one of the world’s worst places to work in terms of rights and protection.

 

 

David Sorensen - Partner

 

 

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

 

 

 

Tribunal Statistics vs Employment Law Reform

 

The Tribunals Service has released statistics, for the period 1 April 2011 to 31 March 2012, showing the types and numbers of claims pursued. At the same time, Vince Cable continues to announce plans to reform employment laws to give more flexibility and confidence to employers managing their workforce. But do they marry up?

 

The total number of claims received by the Tribunal has fallen from 218,100 (2010/2011) to 186,300. For the year 2009/2010 the figure was 236,100. The fall represents a 15% drop in the number of claims being pursued in comparison to last year and a 21% fall in comparison with 2009/2010. 

The government is concerned that too many Tribunal claims are being pursued and, according to John Walker of the Federation of Small Businesses, “Too many small firms don't take on staff because they fear being taken to an employment tribunal.” Can this really be right when the number of Tribunal claims is dropping?

Vince Cable has recently announced a proposal to reduce the cap for compensation in unfair dismissal cases. The cap at present is £72,300. The Tribunal figures for 2011/2012 show that the median award of compensation in unfair dismissal cases was £4,560 and the average award was £9,133. The vast majority of claims do not get anywhere near the cap - so why reduce it?

The Tribunals have also been making more costs awards, where the losing party pays the winner’s costs. Costs should only be awarded in limited circumstances but it seems the Tribunals are more inclined to award costs these days with the number of awards rising from 487 to 1,411, with 1,295 of those awarded to Respondents i.e. employers. In fairness one of those cases involved 800 Claimants being ordered to pay costs, so if that case is counted as one a more accurate picture shows an increase from 487 to 612 costs awards. Nevertheless, there has been an increase in costs awards against a fall in the number of claims pursued. Plainly the Tribunals are already exercising their powers to dissuade employees from making unmeritorious Tribunal claims.

The median awards of compensation for discrimination cases range from £4,267 in religious discrimination cases to £13,505 in sexual orientation cases. Average awards are higher but skewed by maximum awards, such as £4,445,023 in a race discrimination claim. Of course there are going to be very serious cases which warrant substantial awards of compensation, but the figures do not begin to show that compensation is getting out of hand. 

There is so much discussion and consultation about reforming employment law and it all seems to be pointing towards making it even more difficult for employees to exercise their rights and gain access to justice. With the stats showing an ever decreasing number of claims and limited awards of compensation, I’m not at all persuaded there’s a need to change.  

Dan Kindell - Solicitor

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

 

Award of Costs Against Unsuccessful Parties. Toss of a Coin?

It will come as no surprise to readers of this Blog that we are far from fans of the Government’s proposed set of reforms to Employment Tribunal law practice and procedure.

We have talked recently about the serious threat to access to justice posed by the promised introduction (in 2013) of a scheme of fees payable to commence and continue with Tribunal proceedings.

But there is already a disincentive to pursue unmeritorious claims. Tribunals are entitled in appropriate cases to make an award of costs against an unsuccessful party.

In practice those awards are few and far between. When they are made, the Tribunal has a couple of options: it can assess the costs that should be payable to the successful party by the losing party – up to £20,000.00 (a recent change in itself – the figure was £10,000 not long ago); or it can direct that the amount of costs should be assessed by a District Judge in the County Court. County Court Judges and District Judges are used to dealing with complicated assessment of legal costs – Employment Judges rarely are.

So it is with concern that we see that one of the proposed changes to Tribunals’ powers is to remove the current cap on assessed costs. An ET will be able to award any amount of legal costs, though there is no set procedure to govern the process. Toss a coin?

It is not enough that an employee might have to part with a thousand pounds to pursue a case all the way to a Tribunal hearing. If we add to that the threat of legal costs running potentially into tens of thousands of pounds, without even the checks and balances offered by the costs assessment system operated in the County Court, we risk deterring more and more people – and in particular, more and more ordinary working people of modest or average means – from pursuing their rights in the Employment Tribunals.

We’ve said it before but we’ll say it again: the rights granted to us by the great and the good are a waste of space, if we can’t afford to exercise them through due process of law.


Paul Scholey - Senior Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.

In the Spotlight: Tribunal Fees

The Ministry of Justice has now published its consultation paper in relation to charging fees in Employment Tribunals. The Department is seeking opinions 2 proposals put forward in relation to the structures. It is, however, clear that fees will be introduced irrespective of any access to justice issues.

Both proposals divide claims into levels according to the potential complexity of the claim, with more straightforward areas of the law being level 1 (for example breach of contract and unlawful deductions from wages), level 2 claims for more complicated cases such as unfair dismissal and complaints in relation to failure to inform and consult under TUPE, and then the most complicated claims such as equal pay and discrimination are at level 3.

What this means is that it may cost £150 to issue a level 1 claim under option 1 or £200 under option 2. It is proposed that this fee will apply irrespective of the value of the claim. So what this means in practice is that an employee who is owed say £50 unpaid wages will have to pay 3 or 4 times the amount that he is owed in order to reclaim that amount. Employees who simply want a declaration as to their terms and conditions of employment will also have to pay this fee.

If option 1 is adopted, not only will the individual have to pay the £150 on issue, but if the case has to be determined at a hearing, they will then have to pay an additional £250 hearing fee.

Level 3 claims will have to pay £250 issue fee plus a staggering £1,250 hearing fee.

What that will mean in practice is that employees are likely to be dissuaded from pursuing low value complaints simply because the Tribunal fees will be more than they could expect to recover from a claim. There does not appear to be any proposal for a dispensation of the fee in such low value claims.

It is also likely to mean that employers will be taking a tactical approach to claims and may defend claims to a hearing on the basis that the level of the hearing fee that will have to be paid will again put individuals off continuing their claim and the claim is then more likely to be withdrawn.

So whilst the Government’s intention is to encourage early resolution of workplace disputes, the effect will simply be to prevent employees from pursuing complaints and access to justice will limited.

And what does “low value” mean? We’re sure that for the politicians £250 is no great shakes; but for many people it’s a week’s pay. But who will be able to risk (or simply, afford) £150 to try to recover £250. It’s the people who can least afford to take the hit, who will have to do so under the proposed regime.

Toni Haynes - Solicitor

For further information, please contact our Employment Rights team on 0113 245 0733

Number of tribunal claims falls by 8% in 12 months

The annual statistics for employment tribunals and the EAT for April 2010 to March 2011 have been published.

The statistics show that the amount of claims issued in the Tribunal have reduced by 8% in comparison to the 2010 figures. However this still means a total of 218,100 claims were received.

The statistics also reveal that:   


* The number of single claims received has fallen 15% over the period in question
* The number of unfair dismissal and redundancy claims has fallen slightly
* Claims under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 have almost tripled
* Age discrimination claims have risen 32%
* The median award of £12,697 for age discrimination claims is the highest of the discrimination strands, with all others around £5,000 and £6,000.

For further information, please contact our Employment Rights team on 0113 245 0733 or email info@morrishsolicitors.com