What does the future have in store for Employment Tribunal Fees?

After launching their review in June 2015, the Ministry of Justice (MoJ) finally published their review on employment tribunal fees at the end of January. With so many uncertainties in the fold, it is not going to be easy balancing the many competing interests. On the one hand you have the undeniable fact that the number of tribunals has dropped significantly since the introduction of fees, suggesting that there is a potential issue with access to justice. This is combined with the fact that most employees requiring to use the service have been made unemployed and are likely to want to be careful with their finances. On the other hand you have the employers’ legal fees for dealing with spurious employment law claims caused by a lack of deterrent to raise such claims. An employee is rarely going to agree with an employer’s decision to dismiss, no matter how fair it is. Why should an employer have to pay more to an employee for a claim with no merit? This argument is combined with the fact that each claim places a burden on the tax payers’ money.

 

The SNP have indicated a clear desire to abolish these fees north of the border, but currently appear to be somewhat distracted, and there are ongoing wide ranging court and tribunal reform consultations bubbling away in the background. With so many uncertainties and differing opinions, the government is never going to please everyone.

What the MoJ have found 

  • The government has found that the fees paid by claimants have contributed between £8.5 million and £9 million a year in income. This is in line with what was expected when the fees were introduced and is money that would otherwise be required to be paid by the taxpayer.
  • They have found that 48% of people who engage in the free ACAS Conciliation Period avoid the need to go the tribunal.
  • Of those that do need to proceed to an employment tribunal after the ACAS Conciliation Period, between 3000-8000 people did not go on to the tribunal because they could not afford to pay. As well as genuinely not being able to afford to pay these fees, this group of people may not have continued with their claim as a result of not being aware of the ‘Help with fees’ scheme, nor the Lord Chancellor’s exceptional power to remit fees or simply a general unwillingness to reduce areas of non-essential spending.

What the MoJ are proposing

Amount of the fee

It has been proposed that, despite the drop in the number of tribunals, the current financial amounts for tribunal fees will remain. The MoJ’s reasoning behind this is that the fees, as they stand, have contributed an expected amount to the fee income pot, but more importantly the MoJ believes that any such fee must be significant in size. The MoJ argues that a significant fee is required to make a claimant seriously consider their options. It makes claimants assess whether they should explore other avenues such as ACAS Conciliation. It requires them to seriously consider the strengths and weaknesses of their case before continuing to the tribunal. The MoJ was also keen to point out that a successful claimant at the tribunal is normally refunded any tribunal fee.

The fee structure 

Although other fee structures were discussed, the MoJ has decided that the current 2 tier fee structure should continue. The MoJ supports the philosophy that those who have more complicated cases, and who therefore use more tribunal time, should pay more for the service.

Increase in people qualifying for “help with fees”

Currently claimants with either low capital or low monthly income can qualify for the “help with fees” scheme. This can result, for a claimant who cannot afford to pay the fees, in the fee being waived or reduced. The area that the MoJ intends to develop is the use of these fee exemptions. The philosophy of creating a greater awareness of the support available to claimants unable to afford the fees was exemplified last year. The previously over-complicated “fees remission” (a term often associated with illness) scheme was renamed “help with fees” which does exactly as it says on the tin. A simplified structure was also introduced. A consultation on how to progress this scheme further has been launched and will close in March 2017. It has been suggested that the minimum gross monthly income threshold increase from £1,085 to £1,250. This is in line with the National Living Wage. This increase, and an intended increase in publicity and awareness of the scheme, is aimed at helping those who genuinely cannot afford to progress a claim.

The review highlights the exceptional powers of the Lord Chancellor to remit fees. Currently these are not publicised much at all, but can be very useful for a claimant. Take for example a situation where a claimant is over the capital threshold allowing them entitlement to “help with fees”, but can show that their essential expenditure means that they cannot afford to progress with the claim, then the Lord Chancellor must remit the fee. It is submitted in the review that not enough claimants are aware of these powers and this is likely to change going forward.

Insolvency matters

Lastly, as a result of the review, the government has also already removed fees for cases where the claimant would be paid an award from the National Insurance Fund. This means, among other situations, that there will not be a fee for any redundancy payment claims where the company has become insolvent.

What’s the answer?

It would take a brave person to go against a government review that has taken 18 months to complete. For me, some kind of fee is necessary to avoid relentless, spurious claims being made by disgruntled employees. Defining how much claimants are required to pay will always be problematic. It may be that the current £1,200 is too much for a recently unemployed claimant to contribute, but I agree with the MoJ that a substantial fee is required to make a claimant seriously consider his or her options.

For now, whilst the government’s review of fees has concluded, this is not the end of the matter on tribunal fees. As has been mentioned above, the SNP’s desire to abolish fees seems evident. It seems a matter of time before this chapter unfolds. Similarly UNISON’s appeal to the Supreme Court is expected to be heard on 27 & 28 March 2017. A further judgment on tribunal fees can be expected in the fullness of time.

So two things in the chapter are certain:

Firstly this is not the last we’ve heard on tribunal fees.

Secondly you can expect more change going forward.

Andrew Wallace
Solicitor – Employment Law
@EmpLawyerAndy
www.blackadders.co.uk

Step 6: How Do I Communicate A Fair Dismissal? | Employment Lawyer In Your Pocket

blackadders logoEpisode 6: Simon and Jack discuss the essential steps to communicate a fair dismissal. What should you say and what shouldn’t you say? How to say it and when? Can you do a Lord Sugar? Listen to find our more on how to navigate the pitfalls.

 

We would be delighted if you would be able to provide us with some feedback by leaving a comment at the bottom of our podcast page or by responding to this e-mail.

You can also download this podcast free on iTunes.

You can listen to previous episodes in this series here:

Step 5: What Is The Role Of HR In A Formal Meeting?
Step 4: How To Conduct A Disciplinary Meeting

Step 3: How To Prepare For A Disciplinary Meeting
Step 2: How To Conduct An Investigation At Work
Step 1: Where Do I Start When Managing Employees?

The Blackadders employment team
Scottish Legal Awards Employment Team of the Year 2016 

Get in touch with the team on twitter:
@EmpLawyerSimon
@EmpLawyerJack
@EmpLawyerAndy

 

Step 5: What Is The Role Of HR In A Formal Meeting? | Employment Lawyer In Your Pocket

blackadders logoEpisode 5: Simon and Andy discuss the role of HR during a disciplinary meeting and the extent of the support they can provide to the person chairing the meeting. Who is the decision maker? What information can HR provide? And who needs to take responsibility for the name of Simon’s dog…?

We would be delighted if you would be able to provide us with some feedback by leaving a comment at the bottom of our podcast page or by responding to this e-mail.

You can also download this podcast free on iTunes.

You can listen to previous episodes in this series here:

Step 4: How To Conduct A Disciplinary Meeting
Step 3: How To Prepare For A Disciplinary Meeting
Step 2: How To Conduct An Investigation At Work
Step 1: Where Do I Start When Managing Employees?

The Blackadders employment team
Scottish Legal Awards Employment Team of the Year 2016 

Get in touch with the team on twitter:
@EmpLawyerSimon
@EmpLawyerJack
@EmpLawyerAndy

Self-employed, Employee or Worker? Another “plunge” into the legal issues around worker status

The Court of Appeal issued a decision last week in the case of Pimlico Plumbers & Charlie Mullins v Gary Smith. It is anticipated that this case will become the main authority on the legal issues surrounding whether a person is self-employed, employed or in the middle category of worker.

Legal status is a matter with which courts and tribunals have grappled for years. Why is it important? Well, it all boils down to legal rights. Self-employed contractors have fairly limited legal rights under employment law. Workers have more rights but not as many as employees who have the most legal protection. For example, employees have the right to minimum notice periods, statutory redundancy pay and can claim unfair dismissal after two years’ service. Workers do not have these rights, but do share some rights in common with employees such as pension auto enrolment, the right to paid annual holidays and national minimum wage (none of which are available to self-employed contractors).

Hot on the heels of a number of recent decisions involving the legal status of those working in the gig economy (Uber, CitySprint), the Pimlico Plumbers decision brings the matter of status to the fore once again. Mr Smith worked for Pimlico for a number of years. He was self-employed for tax purposes and did his own VAT returns. He penned an agreement which committed him to minimum weekly working hours, required him to wear a uniform and drive a branded van, provided that he could only use other Pimlico Plumbers to substitute work and limited his entitlement to work for other businesses.

Mr Smith raised tribunal claims and he was found not to be self-employed (as contended by the business) but a worker. A worker is someone who undertakes to “do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried out by the individual”. He was also found to be in the extended category of employee (required for discrimination claims) which includes persons employed under a contract personally to do work. He was not, however an employee in the sense of holding the full suite of legal rights.

The Master of the Rolls stated that “the case puts a spotlight on a business model under which operatives are intended to appear to the clients of the business as working for the business, but at the same time the business itself seeks to maintain that, as between itself and its operatives, there is a legal relationship of client or customer and independent contractor rather than employer and employee or worker”.

The relevant considerations:-

  • Mr Smith was under an obligation to provide his services personally (true self-employed persons not being under such an obligation);
  • Minimum weekly working hours (true contractors are supposed to have autonomy as to when they work);
  • There was no express unfettered right for Mr Smith to send a substitute to do the work in his place;
  • Evidence suggested that Pimlico had very tight control over Mr Smith in many aspects;
  • He had to wear their uniform and drive their van;
  • The agreement which he entered into restricted him from working as a plumber in the area for 3 months after termination with Pimlico.

The Court of Appeal reached a conclusion that the personal obligation to perform services and the degree of control exercised by Pimlico was inconsistent with their argument that Pimlico was a client of a business being run by Mr Smith.

If you are in any doubt about the legal status of those engaged by your business and want to avoid a “drain” on your legal resources, take advice from Blackadders Employment Team.

If this case proves at least one thing, this important legal principle is not just water under the fridge”.

Jack Boyle
Associate Solicitor – Employment Law
@EmpLawyerJack
www.blackadders.co.uk