part TWO: Employers in the firing line

Adam Bernstein examines how to protect your business from employment tribunal claims being made against it

By Adam Bernstein | Published:  09 April, 2018

Following a recent Supreme Court case employees wanting to bring claims against their employers can do so without having to pay any fees. So what steps do firms need to take to protect themselves?

The first thing to note is that there are no hard and fast rules as to how to protect a business against employees making tribunal claims. Chloe Themistocleous, an associate at Eversheds Sutherland (International) LLP, knows from experience that unfortunately, tribunal claims are always a risk even for the best and most responsible employers. However, she advises there are some simple steps that can be taken to avoid claims being made and to minimise the risks if claims are made.

“In essence,” says Chloe, “it’s important to ensure that all employees have up to date contracts. Not only is it important to issue a contract of employment when an employee first starts work as failure to do so can result in a claim being made for compensation of two to four weeks wages, it is equally as important to check that the contracts are up to date.” Regular reviews should be undertaken to ensure the contracts the company has in place are accurate and give the protection the company needs.

Next, she says to have clear and accessible policies dealing with discipline, absence and grievances that managers must follow – “a company that fails to follow its own policy may find their defence to a claim in the tribunal fatally wounded.” She adds that it is advisable for policies not to be contractual, so that they can be changed without needing employee agreement first.

Employees, especially managers, need to be trained on recognising discrimination in the work place. This is because, as Chloe notes, damages for discrimination claims are uncapped and can be the costliest claims for employers – “it’s worth noting that discrimination claims can be made against not only the business but individual employees
as well.”

Also, Chloe advises that accurate records of all meetings and telephone calls with employees be kept. “In a large number of tribunal claims there are arguments about what was said and done and by whom. A case can be lost or won on documents and judges are swayed by documents especially if there is proof they were made at the time.”

If a claim arrives
Chloe says it is vital to act quickly on notification of a claim as employers only have 28 days to submit a response. “Missing this deadline can lead to judgment being entered against the employer automatically in favour of the claimant. Unless
there is a very good reason, it is very difficult for those judgments to be overturned.”

She adds that in many cases,the claim form will be accompanied by a list of cases management orders and a hearing date. Her advice is to diarise the key dates, as missing one could lead to the response being struck
out or the business being fined up to £1,000.

It is worthwhile considering who will attend the tribunal as a witness on behalf of the company as soon as possible. Chloe says to make sure they are free to attend the hearing and do not have any pre-booked holidays or medical appointments. It is also important to check the claim form was submitted in time – that it’s within three months from the date of dismissal or discriminatory act – taking into considering any additional time permitted due to the claimant participating in ACAS Early Conciliation. If the claim is out of time it may be possible to get the claim thrown out by the tribunal.

Lastly, Chloe says that “where consideration is being given to instructing solicitors to represent the employer in tribunal proceedings it is best to do so at the outset. Once a response is lodged it can be difficult to depart from points made.”

To conclude
It is usually a lot easier to address any issues at the time they occur rather than at a later stage. However, if in doubt, take advice at the time before committing to a course of action. Claims are expensive in both cost and management time to defend and employers need to be extra vigilant in their compliance with the law and in following any procedures should a claim be made.


 

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  • Part ONE: Employers in the firing line  

    Before July 2013 individuals were free to bring Employment Tribunal claims. However, in July 2013 the government introduced Employment Tribunal fees for anyone wanting to make a claim or appeal a judgment.

    The fee to lodge a claim was £160 or £250 (dependent upon the nature of the claim) and the fee to pursue the matter to a final hearing was a further £230 or £950 (again dependent upon the nature of the claim). If employees won their claim, the tribunal judge could order the employer to pay any fees incurred.

    According to Chloe Themistocleous, an associate at Eversheds Sutherland (International) LLP, after the introduction of tribunal fees the number of claims being brought fell by 80%, but the ratio of claims being successful did not change and so the introduction of fees did little to deter spurious claims. “Clearly,” says Chloe, “some individuals were deterred from making claims due to the cost. Whilst a remission system was in place to help the poorest people, by reducing or waiving the fees, those who missed out on a remission had no choice but to pay the fees or not make a claim; many simply did not want to take the risk.”

    Supreme Court decision
    It appears that while claim numbers were dropping, unrest in trade unions was growing and so Unison decided to challenge the government’s implementation of the fee regime, claiming not only that it was unlawful but that it indirectly discriminated against women.

    Chloe says this was not by any means an easy task as both the High Court and Court of Appeal rejected the claim. “However, at the end of July 2017, the Supreme Court quashed the tribunal fee regime giving judgment that it was both unlawful and indirectly discriminatory.” Effectively the Supreme Court decided that the government acted outside its powers when it introduced fees at current levels, because the fees effectively prevent access to justice.

    What does this mean?
    The ruling means a number of things. Chloe explains: “As a result of the judgment no further fees can be charged by the Employment Tribunal until a replacement scheme is introduced.” This means new claims can now be brought for free again and no hearing fees will be charged claims already lodged.

    She adds that as for those who have already paid tribunal fees, the Ministry of Justice has undertaken to reimburse fees already paid.

    Of course, without the deterrent effect of fees, employers now face an increased risk of employment-related claims from current and former staff. Worryingly, Chloe says it is also possible that some individuals might now try to claim they should be permitted to bring out-of-time claims in respect of past alleged breaches of their rights, “arguing that the now found to be high and unlawful
    fees prevented them from bringing a claim.”

    When a replacement system will be debated and passed by parliament is unknown - it could be months or even longer. The Supreme Court ruling gives parliament a lot of ‘food for thought’, but so far, it is unclear
    what shape a replacement scheme would take.

    As Chloe sees it, while there is a window of opportunity to submit a claim without paying a fee, it is likely that employees will take it. “Claim numbers are expected to rise, but whether they will rise to the levels they were at prior to the introduction of tribunal fees is unknown. If they do, it is unlikely that the current tribunal system, with a reduced number of hearing centres, judges and clerks, could cope.”

    With time, if a new fees regime is introduced and once the media attention has died down, the number of claims will level, but, in the meantime, employers must watch and wait.



     

  • Part two: Powering down 

    With rising energy bills comes the need to invest time in seeking out the best deal. While finding a new energy provider isn’t a money-making exercise, it is something that will lower costs. It is something that can be done alone, but sometimes two heads are better than one.

    This is because unlike the domestic market, the business energy supply works in a way that makes a quick online comparison not so simple. While the domestic market is largely based on location, Chris Caffery, an advisor at Utility Options Ltd, an independent energy consultancy, says the commercial market uses a number of elements that determine the tariff cost: “There is a varied mix of wholesale rates, transportation costs, government taxes and levies and, of course, profit for the suppliers. Generators still rely heavily on coal, oil and gas, so actual or anticipated costs of these fuels can create large differences in retail prices.”

    Go compare?
    Going online to make a comparison isn’t easy. There are a great many more online comparison websites for domestic energy than there are for commercial suppliers. “One of the main reasons for this,” says Chris, “is that domestic tariffs set by suppliers have a longer ‘shelf life’ usually due to a slightly higher margin placed on domestic for this very reason.”

    Other factors are considered such as credit rating (because firms are effectively borrowing from the supplier), and the length of contract (a deal may be poorer at first but over time this improves as market prices rise). Using a broker or consultant doesn’t always guarantee price transparency though; it’s not easy to compare the price that’s being offered unless there’s a change in broker, particularly if the negotiations are happening a day or two before renewal. The advice? Don’t leave negotiations until just before the renewal is due as it doesn’t give an opportunity to shop around.

    As to what could be saved, Chris offers two examples: “We’ve been helping a large motor vehicle repair specialist in Kent that employs 25 staff. Last year alone we saved 21% for that customer which equated to around £2,800 in monetary terms.”

    The second example involves another Kentish firm, a medium sized garage in Ashford. “We consistently save them around 11% over and above their supplier’s renewal prices. This saving works out at around £600 per annum.”

    Chris says that using a consultant isn’t just about the rates that are negotiated. It’s about saving time and not to having to deal with suppliers – “sometimes the extra added services can far outweigh the visual savings on the utility bills.”

    Clearly, there are a number of lessons that can be drawn. Plan well in advance for benchmarking and renewing (switching) contracts. The energy companies would much prefer customers on standard tariffs, but with some planning and effort, decent savings can be made.

    Getting redress
    In the majority of instances the energy supply relationship works out well, but where there’s a suspicion of unfair treatment, and the relationship breaks down, there is a natural inclination ask about rights of redress.

    There are two avenues of complaint open to firms who think they have been unfairly treated. All suppliers have an in-house complaints process. But having exhausted that route, the next step is to try the Energy Ombudsman to have a complaint taken further. The ombudsman can only help microbusinesses (defined as having an annual consumption of electricity of not more than 100,000 kWh, or gas consumption of not more than 293,000 kWh; or fewer than 10 employees (or their full-time equivalent), and an annual turnover or annual balance sheet total not exceeding €2 million. Ofgem doesn’t get involved with individual complaints but it does have plenty of information on its website that may prove useful.

    It is worth noting that help with seeking redress is a service that most consultants and brokers provide to customers. They take up queries with suppliers and use their contacts and knowledge to obtain a swift solution.

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