Tribunal fees decision increases need for managers to get trained.

The Supreme Court have ruled that the Government was wrong to charge people for using Employment Tribunals to settle employment disputes, so they are being removed. But, what will happen now?

Trade union leaders are congratulating Unison for winning a landmark victory in the Supreme Court over the payment of charges for taking a case to an Employment Tribunal.

The charges were introduced in 2013 by the Coalition Government, in an attempt, to reduce the number of ‘have-a-go’ claims being made by workers who were unhappy with an employer or former employer. The evidence is that the charges were successful, the number of claims did fall. In Wales alone the Trades Union Congress (TUC) claims that the number of claims made in the year before charges were introduced was 2,561. But in the most recent year for which figures are available the number was just 757, a fall of 70%.

Whilst there has been an impact on the number of ‘have-a-go’ claims Martin Mansfield the Wales TUC General Secretary said the charges had priced low-paid workers out of justice, even when they’ve been faced with harassment or have been sacked unfairly. Nigel Costley the TUC South West Regional Secretary, added that because the costs of a tribunal case could be as high as £1,200 it meant that even middle paid workers simply could not afford to uphold their rights at work, even if they were being discriminated against or even not being paid.

Supreme Court Judge Lord Reed described employment tribunals as being 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 and concluded unanimously with the other six judges that the fees, were preventing access to justice. As such the Government had been deemed to have acted illegally in introducing the fees. Ministers had said UNISON general secretary Dave Prentis disregarded laws that were centuries old and shown little concern for workers who wanted justice following illegal treatment at work.

Frances O’Grady the TUC General Secretary had described the fees as a bonanza for bad bosses, who had used increasingly insecure work contracts and the inability of workers to afford access to justice as giving them free rein to mistreat their workers and deny them their employment rights. Trade unions are now as a result calling for any employment tribunal fees paid since their introduction, which could according to UNISON general secretary Dave Prentis amount to £27m, to be refunded.

People Management the CIPD magazine also noted that the Supreme Court ruling identified the charges were indirectly discriminatory towards women, because women were more likely to bring a more-costly (and serious) Type B case than a Type A case, and consequently the imposition of charges contravened European Union law.

The high cost of making a claim has said Rachel Suff, employment relations adviser at the Chartered Institute of Personnel and Development (CIPD) meant that some perfectly valid claims will not have been heard in court and people will have been denied justice.

The Supreme Court ruling was described as dramatic by Paul McFarlane, a partner at Weightmans and chair of the Employment Lawyers Association’s legislative and policy committee. He predicted that there would be a significant rise in the number of claims being brought, once the fees were withdrawn. There is likely to be quite an impact on businesses, Acas and the employment tribunal system.

The challenge for employers will be working out how they want to manage the risks when assessing the approach, they want to take when dealing with potential disputes with employees. Will we, see a return to employers paying-off disgruntled employees rather than having to pay the direct and indirect costs of the tribunal process?

It will take some time to see just what effect this ruling with have on the number of claims being made. Justice Minister Dominic Rabb MP who said that the Supreme Court had recognised the important role fees can play, but ruled that the Government had got the balance wrong. So the Government will be considering the full details of the judgment, and that immediate steps will be taken to stop charging fees in employment tribunals and make arrangements to refund people who have paid the fees.

Worries about the ability of the employment tribunal system to cope with the number of claims persist so one way of limiting the number of claims the system has to deal with is to charge people to make a claim. It is likely that in time a new fee regime may be introduced with fees at a lower level and / or a differential charging structure based on the type of claim.

Despite the removal of the employment tribunal fees there are still substantial costs associated with making a claim. Often these costs are met by a trade union or even household insurance policies. So as Mishcon de Reya have identified the removal of the fees could have implications beyond the resolution of employment disputes, and could impact the role of trade unions. If more employment disputes are being financed by insurance policies we may also see a rise in insurance premiums.

Yet, all of the angst over employment disputes is so easily avoidable. Looking at the types of claims that are made it does not take long to identify that many of them are related to employers doing things wrong, sometimes the right thing in the wrong way. But what is also clear from the conversations that I have with all sorts of employers is that they simply do not know what the right thing to do is or how to do the right thing in the right way.

Moving forward the UK needs to address the issue of work place conflict and make sure that it has a strategy in place to ensure that prevention is the first option rather than a cure. Managers need to be better trained and employees of all types need to be educated in what is expected of them and the consequences of not meeting those expectations.

Until every business, regardless of size or type is properly managing its workers we will continue to have an active employment tribunal system and lawyers who are able to make a healthy living rectifying the mess that is created when managers are not properly trained.

You can find out more about how to ensure your managers understand employment law at Work Place Learning Centre.