Tribunal Fees Ruled Unlawful – Protecting your Business Going Forwards

tribunal fees Since tribunal fees were introduced in 2013, there has been a 70% drop in the number of claims. This means that there have been thousands and thousands of claims not taken to tribunal; no doubt some were genuine claims and more than likely, a few vexatious.

That said, it has been estimated that the Government may now have to repay the £32 million that have been paid by claimants in fees across the past 4 years. That’s a lot of claims and an eyewatering amount of legal fees to accompany them no doubt! Just imagine the cost if claims hadn’t dropped by 70%!

Fees and legal costs aside, in reality what we have seen is that many employees were put off bringing claims if they were unsure they would win, or if the cost of bringing a claim was likely to exceed any compensation they might be awarded.

But now the gloves are off.

So, what can you do to ensure that going forwards, with no fees to dissuade anyone, your business isn’t endlessly dragged to tribunal by angry, frustrated or otherwise simply trouble-making employees and ex-employees?

Unfair Dismissal Claims (including Constructive Dismissal Claims)

These can only be brought by those with 2 or more years’ service. This is likely to be a one-day case at Tribunal costing you circa £20,000 in legal fees and one big headache. The median compensation awarded for successful claims is £7,300 and the highest award made was £471,000.

So often, these are brought due to procedural or other errors on the part of the manager or HR team.

So…

Tip #1 Train and retrain your line managers up so they are familiar with your Company’s dismissal procedures (which should be compliant with the ACAS Code of Practice to avoid an additional uplift on any compensatory award given at tribunal) and contractual obligations. Make sure you and they understand what they might inadvertently do when managing staff that could result in a constructive or unfair dismissal claim, and find ways to reduce the risks

Tip #2 Be thorough with investigations before proceeding to dismiss anyone at a formal meeting and make sure your paperwork is complete and up to date.

Tip #3 Don’t treat any appeal as just a nuisance, but instead be thorough in listening to and considering the grounds for the appeal and reinvestigate where necessary Always follow up the outcome of an appeal in writing!

Discrimination Claims (Protected Characteristic e.g. Age, Sexual Orientation, Sex, Disability, Religion & Belief etc.)

These can be brought by all employees or workers as there is no minimum service requirement, and applies to pre-employment stage so includes job applicants too. The highest sex discrimination award came in at £1.7 million! In contrast, the highest religious discrimination compensation was £45,000 and the highest disability discrimination compensation was £257,000. Don’t forget that legal fees can be huge, often exceeding £30-£40,000 for pre-tribunal work plus a 4 or 5-day hearing.

So…

Tip #4 Train staff to be mindful and knowledgeable about diversity and discrimination issues. Make everyone responsible for diversity and inclusion, not just your managers.

Tip #5 Educate staff about the difference between banter and bullying. Where is the line drawn in your organisation and how can staff and managers step in to address matters if the line is being crossed? It’s always easier to manage and resolve issues before the individual concerned has reached the point of no return and submits a grievance claim or resigns.

Tip #6 Beware blind spots and filters i.e. just because someone travels the world it does not make them culturally intelligent and aware of issues and just because someone views themselves as a ‘good’ person it does not mean that they don’t have biases. Equally if all your Directors are in agreement that you don’t have a problem then it’s probably time to do some research into Group Think ‘When all think alike, then no-one is thinking.’

Employment Status Claims

With high profile cases such as Uber, Deliveroo, Pimlico Plumbers and others there is much in the press about whether those who do your work are (from day one), in the eyes of the law, Employees, Workers or Self-employed. Get this wrong and you may later find yourself in court facing an employment status claim. Compensation could be the downfall of a business if it runs to tens of thousands of pounds for each person bringing a claim because compensation for things like minimum wage, sick pay, holidays, benefits, pensions etc might even be backdated for up to 6 years. 

Tip #7 Make sure you have a firm grasp of the different types employment status and what that means in practice (including tax laws), so that you understand people’s rights, as well as your obligations as an employer under law. Very importantly, make sure your contracts are legally compliant and reflect the reality of what the person is actually doing and how they are doing it.

Tip #8 If in any doubt of the above (Tip #7) get appropriate legal advice – whether it’s from a HR provider or a law firm – to understand your exposure to such claims. And don’t just seek out an advisor who will agree with your viewpoint. A bit of independent thinking and some strong scrutiny and review of your working practices are likely to strengthen your organisation, rather than weaken it.

Tip #8 Assess your current key vulnerabilities. For instance, do you have self-employed individuals or people who are workers that could bring claims against you that they are in fact employees? If so, and they win, what might it cost you at tribunal in terms of legal fees and awards, including back pay of holiday, sick etc? What adverse publicity might result from such claims and how might this impact your business?  Once you know where your weak spots are, take action to address them!

Tip #9 Lastly, ensure your managers understand enough about this subject to know how their actions can damage your set up and how to avoid this. For instance, they should understand the need to treat Self-Employed individuals differently to Employees and the ways in which the employment relationship can be inadvertently changed by managers who do not understand the legal issues or the financial consequences of getting it wrong.

We hope you found this useful – don’t get caught out!

How can we help?

At Jaluch, we have a wealth of experience and for around half the price of your average solicitor we can provide expert support in handling Employment Tribunal claims including:

  • Advising on the nature of claims
  • Supporting through the Early Conciliation process with ACAS
  • Drafting the responses (ET3’s) and dealing with subsequent paperwork
  • Helping you to plan your strategy for defending the claim
  • Giving our opinion as to the likelihood of success and possible costs
  • Liaising with ACAS, the Tribunal, or the Claimant on your behalf

Visit our tribunals web page for more info on the services listed above.

We also have a suite of template letters, contracts, forms and guides to help you manage many of the issues raised in this Blast. Check out our HR Docs Wizard website, essentials membership is just £49 per year.

The information contained within this article is for general guidance only and represents our understanding of employment and associated law and employee relations issues as at the date of publication. Jaluch Limited, or any of its directors or employees, cannot be held responsible for any action or inaction taken in reliance upon the contents. Specific advice should be sought on all individual matters.

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