… having an HR Professional supporting you at all times now makes even more sense!
This Supreme Court decision is a game changer for employers – you may have seen or read it about it in the news, as the impact and ramifications are MASSIVE in the world of employment law and HR management.
Since July 2013, ex-employees (and employees in some cases depending on the claim) have had to pay a fee of up to £1,200 to take their employer to a tribunal.
This led to a drop of around 70% in the number of claims, enabling some employers to take a robust approach to employee relations because of the heavily reduced risk of a claim. That protection blanket many employers have enjoyed over the last 4 years has now fallen away big time.
Unison, which brought the case to court, challenged the government’s decision to introduce tribunal fees under a piece of secondary legislation (rather than a full Act of Parliament). The trade union lost its case at both the High Court and the Court of Appeal, but appealed to the Supreme Court.
Unison have won their appeal with the Supreme Court ruling these tribunal fees were unlawful, on the grounds that when parliament confers employment rights on individuals, the Lord Chancellor cannot effectively take them away by introducing prohibitively high fees.
And the Supreme Court held that the Fees Order DOES effectively prevent access to justice. Lord Reed noted that employment tribunals “are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs and those who are vulnerable to long-term unemployment”. The fees, the judges concluded, were preventing access to justice.
It also held that the Fees Order imposed unjustified limitations on the ability to enforce EU rights (i.e. those claims based on EU law), and was thus unlawful under EU law.
All fees paid by employees between 2013 and now will be refunded by the government – thought to be over £27m.
Where does that leave employers?
- it is unlikely that fees will disappear entirely. The government will probably bring in a different fees regime, with lower fees and possibly with employers contributing to the cost at the outset. But we don't know any details yet and there will likely be further consultation on it.
- any employees who might have brought claims between 2013 and 2017, but who were put off by the fees, can now seek permission to bring them 'out of time'. This will be easier with discrimination cases than unfair dismissal cases, but there will inevitably be a large number of such cases brought by ex-employees.
The upshot is that whilst the impact of this ruling on the tribunal system will take a long time to unravel, it is important to understand that, with immediate effect, the pendulum has largely swung back in favour of the employee, and we are back to the pre-July 2013 position.
Employers will now need to keep on their toes and be more proactive than ever in promoting positive and good relations with your employees to avoid the reputational risk, time and costs of defending a tribunal claim, now fees will no longer be a barrier to a disgruntled employee taking action against you – even for the vexatious claims. So, the RISK FACTOR (and being ultra conscious on practices and procedures) HAS JUST INCREASED — A LOT.
It is likely that there will be a significant rise in the number of claims being brought, which will have knock-on implications for all employers. Also, remember that the Acas mandatory early-conciliation scheme will continue to encourage parties to settle claims before litigation so now that the fees have gone, I suspect employers will feel under more pressure to settle at the Acas stage, rather than waiting to see if disgruntled claimants follow through and issue a claim.
Effective HR management should always seek to prevent a problem getting to a litigious stage in the first place. Being proactive rather than reactive to issues is always a better strategy to take with employees.
If you need to review your employment practices and procedures we can conduct an audit on your current HR function and documents. Don't leave it to chance!