Employment Update for Small Businesses
No doubt you will have seen the headlines last week, when the Supreme Court ruled that employment tribunal fees were unlawful. In this month’s newsletter I explain what this means and consider the likely impact of this decision.
Please contact me if you would like to find out a bit more about any of the subjects raised in this update or if you need any help or advice.
Please forward this email to any of your contacts who might find it of benefit.
Supreme Court Rules Tribunal Fees are Unlawful
What Will the Impact be for Employers?
Employment Tribunal fees were introduced in 2013 as a response to the ever increasing number of claims being brought. Many of the claims were without merit, with claimants putting in claims in the hope that the employer would attempt to settle them to avoid the cost of the tribunal process. At that time it was very easy to register a claim on line, and there was no cost involved.
The introduction of fees saw a massive drop in claims and almost certainly did away with the most frivolous claims. Unfortunately, however, it appears that many valid claims were not brought due to the cost involved. Claimants have had to pay £250 up front for bringing claims such as unfair dismissal and discrimination, with a lower fee of £160 applying to more minor claims (e.g. unpaid holiday pay, etc.) You will have seen in the news that the figure of £1,200 has been cited, but that takes into account the hearing fee that the claimant must pay if the case proceeds to a full hearing (£950 for unfair dismissal, and £230 for contractual claims).
Now that these fees have been declared unlawful by the Supreme Court, the fear is that we will see a return to the bad old days of large numbers of frivolous claims. However, at the moment it is not clear how much change there will be. The Government may attempt to reintroduce fees on a reduced basis. That could still act as a disincentive to bring a claim without merit. However, with the focus on Brexit and with their reduced majority, the Government may decide that this issue should be kicked into the long grass!
Also, when fees were introduced, an extra process step was brought in – claimants have to contact ACAS before bringing any claim and ACAS then look to see whether the claim can be settled at that point. A claim cannot be lodged at the Tribunal unless and until the claimant has received a certificate from ACAS confirming that this stage has been completed. It is unlikely that this step will be removed, so there is still the possibility of a “reality check” of the merits of the claim being applied at that point.
At the moment, the employment tribunals have been tasked with refunding fees that have been levied since 2013 – a mammoth and complicated task, particularly as many employers will have been obliged to compensate claimants for the fees paid where the claimants succeeded in their claim. Also, they have stopped taking fees for all new claims, and fees will no longer be charged unless and until they are reintroduced.
in light of this decision, employers will need to be very careful when considering dismissing an employee to ensure they follow the correct procedures, and are able to justify any decision to dismiss.
National Minimum and Living Wage Rates
The current rates for the National Living Wage (for those aged 25 and over) and the National Minimum Wage are as follows:
£7.50 per hour for workers aged 25 and over
£7.05 per hour for workers aged 21 to 24
£5.60 per hour for workers aged 18 to 20
£4.05 per hour for workers aged 16 and 17
£3.50 per hour for apprentices under 19 and those over 19 in their first year*
*N.B. Apprentices over 19 and who have completed at least one year are entitled to the appropriate rate for their age.