In December 2018, the Department for Business, Energy and Industrial Strategy (BEIS) announced a scheme to name employers who fail to pay employment tribunal awards.

Back in July 2017, the Taylor Review was published, and the Government backed the proposal to establish a naming and shaming scheme, where those employers who do not pay employment tribunal awards within a reasonable time frame are named in a form of public humiliation.

The scheme is currently in operation and the intention is to act as a deterrent and encourage employers to make payments in a timely fashion. The scheme works in a similar fashion to that of those employers who have underpaid the minimum wage and it runs parallel to the existing employment tribunal penalty scheme (established back in April 2016), whereby additional financial penalties can be imposed on employers where awards are unpaid for 42 days after the tribunal’s decision.

The naming shaming scheme works by disgruntled employees registering with both the penalty scheme and naming shaming scheme to name the employer. The award must be more valued at £200 or more to be eligible for naming shaming scheme and does not extend to include ACAS conciliated settlements.

Once the name of the employer has been registered, an enforcement officer will verify the claim and issue a notice of warning to the employer. If the award remains unpaid for 28 days, a penalty notice is sent requiring a 50% payment of the award plus 8% interest accrued per annum. The penalty notice will also include the notion of naming and shaming but, allow a 14-day period to put forward representations.

If no representations are made or unsuccessful in the 14-day period, the name of the employer will automatically be added to the next round of name shaming group.

The Ministry of Justice has confirmed that it intends to reintroduce fees for employment tribunal claims.

Tribunal fees were first introduced in July 2013 starting at approximately £160 and in certain circumstances ranging up £1,200.

The government was heavily criticised for denying claimants access to justice in a judicial review Unison won the case and the fees were declared unlawful.

The Ministry of Justice stated that it is ‘doing all it can’ to ensure a refund for everybody who paid a fee in the four years they were in existence. On a cumulative basis the Ministry of Justice have made refunds totalling £15.8m.

Since fees were abolished, the Ministry of Justice reported that there has been a staggering 90% increase in claims.

The Ministry of Justice stated that they are confident that a fee system can be created capable of ensuring claimants access to justice, if that fee was at the right level.

This proposal is somewhat controversial and has been faced with critical comments such as ‘Only the staggeringly myopic would suggest reintroducing fees’, and ‘For Claimants, this proposal really is just adding insult to injury’.

Despite the criticism, the Ministry of Justice insisted that the scheme is not an attempt to squeeze as much income as possible out of each litigant. Whether the Ministry is able deliver a scheme ensuring access to justice remains to be seen.

The Lord Chancellor has provided an update on employment tribunal fees and the refund scheme fees to the House of Commons Justice Committee. The update includes:

• The government has sought legal advice on the way courts and tribunals are funded;
• Regarding refunds, large numbers of potentially eligible people have apparently failed to apply since 15 November 2017 – when the refund scheme was rolled out in full. The Ministry of Justice is writing to affected people in order to raise awareness; and
• The government incurred costs of approximately £305,000 defending the Unison case and it also has to pay Unison’s costs in those proceedings.

The recent annual report provided by Acas has demonstrated that the number of people intending to bring a tribunal claim has increased:

• From 1,700 to 2,200 per week in the year to 31 March 2018 when compared to previous year.
• Demand for the Acas early conciliation service by almost 20%.
• There were over 7,000 (39%) more claim forms lodged following early conciliation notification in the year to 31 March 2018 than in the previous year. 

Only 20% of the predicted £33million refund has been returned to claimants since employment tribunal fees were declared unlawful. A spokesperson for HM Courts and Tribunals Service has said that around 10,000 letters are being sent every month to people who are potentially eligible for a refund.

The Ministry of Justice has published the Employment Tribunal quarterly statistics for the period January to March 2018.

Statistics show that:

• The number of single claim receipts, disposals and outstanding caseload all increased by 118%, 43% and 89% compared to figures of the same period in 2017
• Receipts of multiple cases decreased by 40%
• Outstanding caseload for multiple cases increased by 21%.

From the period January to March 2018, Employment Tribunals disposed of 10,343 claims, which is 9% less when compared to the same period in 2017. There has also been:

• 36% decrease in multiple claims disposals;
• 29% of claims disposed of were conciliated by Acas;
• 17% withdrawn;
• 16% dismissed on withdrawal;
• 14% struck out; and
• 10% were successful at hearing.

The provisional tribunal quarterly statistics for the period October to December 2017 were published by the Ministry of Justice on 8 March 2018. It was reported that during this quarter:

• Since the abolition of employment tribunal fees, approximately 3,000 new cases were issued every month;
• The number of single claims and disposals received by employment tribunals rose by 90% and 21% respectively against the same period in 2016. This resulted in a 66% increase in the outstanding caseload;
• 4,800 applications were received by employment tribunals under the employment tribunal fee refund scheme. Of these, 3,337 refund payments were made, amounting to £2.76 million;
• Employment tribunals disposed of 7,775 claims during the quarter. This is down 30% on the same period in 2016. 31% of claims disposed of were settled via Acas, 21% were withdrawn and 8% were successful at hearing; and
• The number of multiple claims received by employment tribunals increased by 467%, and disposals decreased by 55% compared to the same quarter in 2016.

From 6 April 2018, tribunal compensation limits increased. The maximum compensatory award for unfair dismissal has risen from £80,541 to £83,682 and the maximum amount of a week’s pay (used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal), has risen from £489 to £508.

On 14 December 2017, the Ministry of Justice published the tribunal quarterly statistics for the period July to September 2017. The most significant development is that since the same period in 2016, the number of claims lodged have increased by 64%, which is the highest for four years. This can be explained by the abolition of tribunal fees on 26 July 2017.

The government has revealed that it still has £31 million to refund following the full roll-out of its scheme for refunding tribunal fees. Justice Minister Dominic Raab said the government had received 4,689 applications, with 2,600 receiving approval.

 

Rabb said the refund scheme was expected to be more expensive than previously estimated, costing around £35 million (£2 million more than earlier estimates). He said that claimants who were deterred from bringing claims because of tribunal fees would be able to bring a claim out of time and reassured applicants that the government would work closely with Citizens Advice Bureaux to identify and contact all eligible claimants.

The Government has now rolled out the tribunal fees refund scheme in full. As anticipated, the scheme is open to both claimants and respondents who paid a fee, including those who had to reimburse their opponent for a fee incurred by the opponent pursuant to an order.

The scheme does not cover payments under a settlement agreement designed to compensate a claimant for a fee that they might have paid.

Click here for more information.

 

 

After the flurry of activity from the July Supreme Court decision – that Employment Tribunal fees are unlawful – what happens now?

 

1.  It is unlikely that fees will be abolished entirely.  There is probably going to be a government consultation on a new fees regime with lower fees and/or fees payable by an employer in defending a claim.  Although with Brexit on the agenda, the government have higher priorities at the moment and run the risk of another judicial review with any new fee order that it introduces.

 

2.  The Tribunal Service must update the tribunal rules and the online claim form.  The online service has already been withdrawn for essential maintenance work to remove references to fees. During this period, anyone seeking to issue an Employment Tribunal claim will need to complete an ET1 form and submit it by post, or in person to the relevant office.

 

3.  The Supreme Court made it clear that all fees paid between 2013 and now will have to be refunded.  This is easier said than done and raises many questions:

• Will employees have to apply for refunds or will this be done automatically?
• Many successful claims will have had fees ordered to be paid by the Employer, and there will probably need to be a manual trawl of all cases. In these cases, will employers have to ask for refunds from the employees once they have received their refund or will the employer be refunded by the government directly?
• What about employees who paid the fee but then settled their claims? If they get a refund will the employers who settled be able to recover that part of the settlement representing the fee? Will they recover it from the employee or the Government?

 

4.  It is possible we will see a raft of old claims.  We might see people, who chose not to bring a claim because of the fees, argue that they were prevented from doing so because the fees were unlawful and try to bring their claims now.  Or potentially they could sue the government because they were unlawfully denied access to justice.

 

5.  Since fees were introduced, employers might have made risky decisions in relation to how they deal with workplace issues, hoping that their employees would be put off or unable to bring a claim because of the fees.  Following this judgment, employers might want to act more cautiously moving forward, certainly until we know what the new system is going to be.

 

6.  Unions used fees as the carrot to increase membership amongst employees.  With fees removed will unions see a fall in their members?

 

7.  The biggest question now is will employment tribunals increase by 70% back to 2013 levels and if so, can the Tribunal Service and ACAS cope?

 

Three words – “watch this space……”

 

For more information about Employment Tribunals please contact the Employment Team at Morgan LaRoche.

It is common practice for employers to call a member of a dismissal appeal panel to give evidence at an unfair dismissal tribunal hearing. This case illustrates that a failure to do so will not be fatal in every case. This may particularly be so where no new evidence or arguments are raised by the employee at the appeal. However, if an employer is unable or unwilling to call an appeal witness at the hearing, it should ensure that the evidence provided by other witnesses regarding the rest of the dismissal procedure followed is thorough and robust.

 

While the point appears to not have been raised in this case, it is worth noting that Acas Guide, Discipline and grievances states that it is good practice for an employer to confirm in writing to an employee the results of their appeal and the reasons for the decision. It is therefore good practice for employers to set out the reasons why an appeal is dismissed or upheld in the appeal outcome letter.

 

Facts

 

Mrs Elmore was employed as a maths teacher at Darland High School (the school) from 2002 until her dismissal on capability grounds in April 2015. Inspections carried out at the school by the Welsh school inspectorate found its performance in maths was consistently lower than other schools. In January 2014, Mrs Elmore’s class performed particularly badly in their exams. The school took Mrs Elmore through its capability procedure. However, Mrs Elmore failed to improve to the extent required by the school and it dismissed her.

 

Mrs Elmore appealed her dismissal. The appeal panel upheld the decision to dismiss but provided no reasons for doing so in their letter confirming the outcome of the appeal.

 

Mrs Elmore brought a claim for unfair dismissal in the employment tribunal. No member of the appeal panel gave evidence at the hearing. The tribunal found that Mrs Elmore had been given adequate support and encouragement during the capability procedure and that the school had grounds for its conclusion that she had failed to reach the required standard. The tribunal concluded that Mrs Elmore’s dismissal was both procedurally and substantively fair.

 

The tribunal noted that the appeal panel had failed to set out their reasons for upholding the decision to dismiss. However it decided that it could be gleaned from their decision to uphold the dismissal that their reasons were the same as those of the dismissal panel.

 

Mrs Elmore appealed to the Employment Appeal Tribunal (EAT) on the basis that the employment judge erred in law by concluding that her dismissal was procedurally fair when there was insufficient evidence to conclude that there had been a fair appeal.  The EAT dismissed the appeal.

 

The EAT rejected Mrs Elmore’s argument that a tribunal cannot conclude that a dismissal is fair without hearing from a member of the appeal panel to explain the reasons for dismissing the appeal.

 

The EAT decided that the tribunal had been entitled to reach the conclusion that her dismissal was fair on the facts. In particular:

• The Head of Maths at the school had given evidence at the hearing. He had conducted many observations of Mrs Elmore’s lessons and out of eight lessons observed, five were classed as inadequate, three were adequate and none were good – the school’s required standard.
• A member of the capability hearing panel had given evidence at the hearing and the tribunal had found her evidence on the reasons for the decision to dismiss impressive. It found that the reason to dismiss was because Mrs Elmore had not achieved the target set by the school in relation to an important educational subject and because of her attitude towards achieving that target. The tribunal had concluded that the panel had approached the questions they had to decide in an objective, impartial and balanced way in coming to the decision they did.
• No new arguments or evidence had been put forward on appeal. There was no suggestion that the appeal panel was improperly constituted, biased or behaved improperly.
• Minutes of the appeal hearing were disclosed and considered by the tribunal. The minutes indicated discussion and exploration of the relevant issues and appropriate questions were asked by the panel. The discussion and questioning of Mrs Elmore was inconsistent with any suggestion that the appeal hearing was a mere formality or rubber-stamping exercise and provided no basis for thinking that irrelevant factors were in the mind of the appeal panel when reaching their decision.
• The appeal decision letter could be criticised for failing to set out the reasons for the decision to uphold the appeal, particularly as it was a career-ending letter for a long-standing member of staff.

In February, the Ministry of Justice formally launched its website of Employment Tribunal decisions. All future Tribunal decisions will be uploaded onto the website. Below we consider the impact that publication of decisions may have upon employers.

There are significant practical implications arising from increased accessibility.  A website user can search for decisions by drop-down menu or free text search, which could include the name of the employee or employer for example.  If a decision is widely dispersed on the internet, then it will become increasingly visible on a results page.

Increased accessibility may cause some concern for employers. The risk of adverse publicity for businesses is now much greater, as allegations about personnel or confidential commercial information become more public.  Employees bringing a claim could seek to draw inferences about the business from findings of fact in previous decisions, particularly those relating to discrimination claims, which may be taken out of context.  Statistics or patterns about a business involved in Tribunal proceedings may also be compiled and published. 

The other side of the coin is that employers will be able to search for any decisions involving job applicants or employees, although care should be taken to ensure that detrimental treatment does not follow.  Employees will now risk being named on this website should they bring a Tribunal claim – this increases the risk a future employer will find out.

Notwithstanding the above, a key advantage of greater transparency is that the publication of decisions should provide helpful examples of how Tribunal’s approach issues of fact and law. Previous decisions will also include examples of compensation awarded which should help to encourage realistic expectations.

Click here to take a look at the website https://www.gov.uk/employment-tribunal-decisions

The government’s review of the introduction of fees in the employment tribunals (ET) was published on 31 January 2017.

The review accepts that the introduction of fees may have discouraged individuals from bringing ET claims, but not that it prevents Claimants from pursuing their claims.

It also identifies that there has been a significantly greater fall in ET claims than originally anticipated. Consultations are being held to extend the Help with Fees support to people on lower incomes. It has decided that certain claims under the national insurance fund will be exempt from fees with immediate effect.

Tribunal compensation limits will increase on 6 April 2017.

The maximum compensatory award for unfair dismissal will rise from £78,962 to £80,541.

The maximum amount of a week’s pay, used to calculate statutory redundancy payments and various awards including the basic and additional awards for unfair dismissal, also rises from £479 to £489.

 

The database has now gone live. The database covers decisions from England, Wales and Scotland. It is understood that it will initially cover new or recent judgments. It is not currently known whether existing judgments will be added to the database as well.

Click here to access the database https://www.gov.uk/employment-tribunal-decisions 

The penalty regime for unpaid employment tribunal awards came into force on 6 April 2016. Defaulting employers may be issued with a penalty notice requiring them to pay a financial penalty by a specified date.

It has been confirmed that since the introduction of the new regime the Department for Business, Energy and Industrial Strategy (BEIS) has issued 60 penalty notices and employers have paid more than £83,000.

A BEIS spokesperson said: “Failing to pay employment tribunal awards is unacceptable and the government is committed to tackling the issue. That is why last year we introduced penalties for employers who don’t pay claimants what they are owed.”

The Ministry of Justice has published the statistics for tribunals for the period July to September 2016. During this quarter:

• Employment tribunals received 4,300 single claims (up 2% on the same period in 2015) and 27,200 multiple claims (an increase of 45% on the same period in 2015).
• Employment tribunals disposed of 3,500 single claims and 4,700 multiple claims (down 10 % and 16% respectively on the same period in 2015).
• 2,261 remission applications were submitted for the issue fee and 485 for the hearing fee. During the quarter, 54% of remission applications for the issue fee were either fully or partially successful (4% lower than the same quarter last year) compared with 79% of hearing fee remission applications (8% lower than the same quarter last year). On average, it took 4.4 days for a decision to be made on remission applications.
• The mean age of a single claim at disposal was 26 weeks, down five weeks on the same period in 2015.

HM Courts and Tribunals Service has confirmed that future Employment Tribunal decisions will soon be readily available online. The online database will enable people to access recent tribunal judgments that have been handed down in England, Scotland and Wales.