QUEUE HERE FOR THE GRAVY TRAIN
Furious bosses warn of a tide of claims as Supreme Court makes it much easier to go to an employment tribunal
JUDGES were last night accused of encouraging spurious litigation by ripping up employment tribunal reforms.
The Supreme Court said ministers had acted unlawfully in bringing in fees of up to £1,200 to make a claim. Seven judges ruled unanimously in favour of the union Unison, which said the charges discriminated against women and the poorly paid.
The court said the fees were ‘inconsistent with access to justice’ and had resulted in a big fall in claims.
But Charlie Mullins, who founded Pimlico Plumbers in London, said: ‘This is a charter for litigants which will fuel Britain’s compensation culture.
‘I have sympathy with people with genuine claims but a lot of people make false allegations and try it on. This ruling will only encourage those who abused the system to come back into the market.’
Smaller companies are worried they will now have to settle cases they would win because they cannot afford the time and expense of fighting them. The Institute of Directors, which represents 30,000 small and medium sized businesses, predicted the decision would ‘open the door to a spike in malicious or vexatious claims’.
Seamus Nevin, its employment and skills chief, said: ‘Businesses across the country will be extremely alarmed by
today’s judgment. Before fees, individuals faced no risk or barriers in bringing claims that were not merited. Even the weakest or most vexatious cases meant sizeable legal expense and wasted valuable management time for companies.’
The court’s summary said claimants on low to middle incomes could not afford the fees ‘without sacrificing ordinary and reasonable expenditure for substantial periods of time’.
The judges – headed by the court’s president, Lord Neuberger – decided that the fees indirectly penalised women because they were more likely to bring discrimination cases against their employer.
The Government will have to refund around £32million to thousands of people charged for taking claims to tribunal since July 2013.
Unison’s general secretary Dave Prentis described yesterday’s court ruling as a major victory for employees everywhere. He said ‘these unfair fees have been letting law-breaking bosses off the hook for years’.
Ranging between £390 and £1,200, the fees were introduced in 2013 by then Lord Chancellor Chris Grayling after lobbying from businesses deluged with tribunal claims. The number of employment tribunal claims slumped by almost 70 per cent in the first year.
The IoD is particularly worried that new gender pay reporting requirements and the ‘ immigration skills charge’ could lead to a surge in claims from women and workers from outside the European Union.
From April, medium and larger firms wanting to hire a worker from outside the EU have had to pay a fee of £1,000 a year, with smaller firms paying £364 a year. The institute said the change, which is supposed to encourage firms to hire British workers, will cause unsuccessful job applicants from outside the EU to lodge discrimination claims.
From April next year firms with 250 or more employees will have to publish their gender pay gaps – the difference between the average salary of male and female employees.
The IoD warned that this could also ‘lead to an increase in unjustified claims’, particu larly in male-dominated industries such as engineering. The Supreme Court ruling is a boon to solicitors, who predicted that the abolition of fees could cause the number of tribunal claims to return to pre-2013 levels. Emma Bartlett, a partner at Charles Russell Speechlys, said: ‘ The impact of today’s decision will be enormous, it will be a total game changer for employment law.’
Emma Burrows, head of the employment department at Trowers & Hamlins, said the increase in claims will put further pressure on tribunals already under strain following funding cuts. But TUC general secretary Frances O’Grady said: ‘This is a massive win for working people.
‘Too many low-paid workers couldn’t afford to uphold their rights at work, even when they’ve faced harassment or have been sacked unfairly.
‘Tribunal fees have been a bonanza for bad bosses, giving them free rein to mistreat staff. Any fees paid so far should be refunded as soon as possible.’
Labour leader Jeremy Corbyn described it as a ‘significant win against government’s sky high tribunal fees which price workers out of justice’.
‘Labour would scrap them,’ he added.
Liberal Democrat deputy leader Jo Swinson said: ‘This is a landmark victory for workers and for access to justice.
‘The Government should be that it fought this case all the way to the Supreme Court. Ministers have wasted workers’ taxes in an attempt to undermine workers’ rights.’
Justice Minister Dominic Raab said: ‘In setting employment tribunal fees, the Government has to consider access to justice, the costs of litigation, and how we fund the tribunals.
‘The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case.
‘We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid. We will also further consider the detail of the judgment.’
‘The impact will be enormous’