The Pendulum Swings Again

Things are hotting up again in Employment Law.  Since the turn of the year, we have noticed an increase in the number of claims being brought by employees against their employers, for unfair dismissal in particular.

Employment Law always tends to be dependent upon the fortunes of the wider economy, as well as something of a political football.  Labour, when in power, are keen to increase employee’s rights and the Conservatives to close them down as far as they can when it is their turn.  Nowhere was that debate more active than in the years between 2010 and 2014.

One of the Conservatives’ innovations was to introduce fees in employment tribunal cases.

Prior to July 2014, it has always been completely free to issue a claim at an employment tribunal, whether it was for unfair dismissal, discrimination or unlawful deduction from wages. That fact, taken together with New Labour’s increase in the maximum compensatory figure in 1998 (from £12,000 to £50,000) led to a large increase in the number of employment tribunal claims.

When the Conservatives came to power in 2010 (albeit as part of a Coalition government), they pledged to swing the pendulum back towards the employer.  They increased the period of qualification for unfair dismissal from one year to two years.  They also introduced various other reforms but none had such a striking effect as the imposition of fees at the employment tribunal for issuing a claim and for having it heard.

This meant that a claim for unfair dismissal would cost the employee £250.00 to issue, plus a hearing fee of £900.00 payable before the tribunal hear the employee’s case.  That limit applied to discrimination cases and certain other types as well.  Employees who wished to claim unlawful deduction from wages would have to pay an issue fee of £160.00.  The effect of those fees was almost overnight to slash the number of claims being brought and there was a dramatic decrease of about 75%.

Unison campaigned hard to seek to overturn the fees regime.

The union Unison spent much time and money in pursuing various cases for judicial review against the Government, seeking to overturn the fees regime.  By last summer, they finally achieved their goal when the Supreme Court ruled that the fees regime had been imposed unlawfully right from the start, which meant that the Government had to refund all those Claimants who had lodged claims.

That was now about eight months ago.  It takes a few months for the effects of this sort of judgment to filter through the system and now we are beginning to see a number of claims from disgruntled employees.  I suspect had the fees regime been in place, we would not have seen.  Recent statistics from the tribunal show that the number of cases being issued is significantly up.

My message to employers now is that you should not be complacent and you should be prepared for disgruntled employees to “have a go”.  For well-run ethical employers this will not be a difficulty.  However, it is best to be prepared as disputes can arise even in the best organised and run work places.

Put yourself in the driving seat

As an employer, you can never prevent claims arising but you can put your business in the driving seat by making sure that your contracts of employment and staff handbooks are up to date.  Review your policies and ensure that you know your managers are trained in how to deal with grievances and disciplinary matters

For smaller employers, or those without dedicated HR facilities, one of the biggest challenges is to obtain timely and cost-effective support.  A common way to source this advice is to outsource it to an HR Consultant or to a law firm.  We can support you either on an ad hoc basis or by acting on a retained basis so that for a monthly fee you know you can get in contact and get a quick answer when needed.  Please call me to discuss how we could help you.