Employment Tribunal Fees Struck Down by Supreme Court

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In a resounding decision that emphasised the right of everyone to have affordable access to the justice system, the much criticised fees levied on complainants by the Employment Tribunals and the Employment Appeal Tribunal have been struck down as unlawful by the Supreme Court.

The fees  which range from £390 for straightforward cases to £1,200 for more complex ones have been a source of great controversy since their introduction in 2013. Trade union Unison mounted an unsuccessful judicial review challenge to them but has now triumphed in its appeal.

The Court found that the fees are unlawful, both under domestic and European law, in that they prevent access to justice. That was a constitutional right inherent in the rule of law and tribunals could not be viewed merely as providing a service of value to those who bring claims before them.

The fees charged in less complex cases bore no relationship to the amounts sought and therefore acted as a deterrent to claims for modest sums or non-monetary relief. Many such claims could be regarded as futile or irrational in that the fees exceeded the sums claimed. The introduction of the fees had led to a dramatic and sustained fall in the number of claims, particularly low-value claims, and they were the most frequently cited reason for not submitting a claim.

The Court noted that, in many cases, those on low or middle incomes could only pay the fees by making sacrifices and foregoing a reasonable standard of living. In those circumstances, they could not be regarded as affordable. The fees also contravened EU law guarantees of an effective remedy before a tribunal and imposed disproportionate limitations on the enforcement of EU employment rights.

The fees were also indirectly discriminatory, within the meaning of the Equality Act 2010, because the higher fees for more complex claims put women at a particular disadvantage. The evidence showed that a higher proportion of women than men brought such claims. The higher fees did not correspond to a higher workload being placed on tribunals and acted as an equal deterrent to unmeritorious and meritorious claims.

The Ministry of Justice has said that the Government will take immediate steps to stop charging ET fees and refund payments made since 2013.

Potential Public Interest in Whistleblowing Case after Breach of Contract

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Public interest disclosure were introduced from 25th June 2013, under S.43B (1) of the Employment Rights Act 1996, public interest disclosures had to be “in the public interest” to qualify for protection. In Parkins v Sodexho Ltd the Employment Appeal Tribunal’s (EAT) ruling was reversed due to the ‘in the public interest’ test being added. For Parkins v Sodexho Ltd the definition of a qualifying disclosure concerning a failure to comply with a legal obligation was broad enough to cover a breach of an employee’s own contract of employment.

In the landmark whistleblowing case Chesterton Global v Nurmohamed, Nurmohamed (N) believed Chesterton were purposely miss allocating  between £2 and £3 million of actual costs and liabilities. N had been dismissed which he believed was due to him disclosing in the public interests about the alleged use of completely false profit and loss figures to estimate commissions, transitional payments and profit bonus calculations paid to over 100 managers.

It’s for the ET to consider all of the circumstances pf the particular case, the following four factors should be taken into account:

  • The figures of people in the group whose interests the disclosure served.
  • The nature of the interests affected and the extent to which they are affected by the wrongdoing disclosed.
  • The nature of the wrongdoing disclosed.
  • The persona of the alleged wrongdoer and its ‘community’, i.e. staff, suppliers and clients

In this case, N did have other outside of himself (the other managers) in mind, which resulted in a section of the public would be affected and the public interest test was satisfied. An EAT upheld N’s claim, after the ET also did. The EAT ruled that the key issue was whether the worker believed on an objectively reasonable basis that the disclosure was in the public interest. The court of appeal found the interest in question to be personal in character, this conflicted the facts of the case that made it reasonable to regard the disclosure as being in the public’s interest. Inevitably it was ruled there was dual interest, between personal and public.For example, a disclosure which provided evidence that police officers workforce were being largely reduced might well be in the public interests, as well as in the personal interests of the police themselves, because of the impact on public safety.
However in the same breathe many other cases it could be reasonably ruled for that such a disclosure ultimately was in the public’s’ interest.

 

For this case, it had over 100 people affected by the alleged misconduct, plus there were other features which rendered the disclosure in the public interest. Most vitality the disclosure consisted of allegations of misstatements in the accounts to the sum of £2m to £3m. It impacted numerous people inevitably, there was no mistake of law in the ET’s decision.
This case can be seen as progression and new interpretation on the new statutory test means in whistleblowing legislation. However the ruling still shows that the “in the public’s interest” is broad concept, each cases circumstances must be considered using the four-factor approach.

Groundbreaking whistleblowing case to consider “public interests” test

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Chesterton Global Ltd (t/a Chesterton Humberts) and another v Nurmohamed, case was heard by the Court of Appeal. The case holds great importance for future whistleblowing cases.

The appeal was heard in the Royal Courts of Justice on 8 June. In case of terms in considering when a disclosure is “in the public interest” this case is vital, for claimants seeking to establish that a disclosure is protected this is a key challenge.

 

The cases brings wide attention and importance, as will adhere to the new whistleblowing laws that were introduced in June 2013. The changes were intended to prevent potential claimants misusing whistleblowing protection according to the disclosure of matters to their own contract of employment. These changes in the laws were that to be protected, a worker must have reasonably believed that he or she was making the disclosure “in the public interest”

 

These changes to the law have opened wide debates to the scope of the phrase “in the public interests”. The Chesterton Global ltd case is the first appeal cases to draw on the debate in court.

Looking at the hearing in terms of impact to UK employment law, it is hard to argue against this being the biggest case that the Court of Appeal hears in 2017.

 

Whistleblowing charity Public Concern at Work intervened in the case and was able to make representations before the Court of Appeal. In the case Mr Nurmohamed, a manager with a large estate agent, raised concerns about discrepancies with how his commission under a new commissioning structure was calculated.

He contended that the discrepancies were deliberate and that the accounts were being manipulated by management to the benefit of shareholders, thereby reducing the amount that he and more than 100 other managers would receive by way of commission. The employer consequently dismissed Mr Nurmohamed.

 

He brought an unfair dismissal claim in the employment tribunal, including an allegation that the dismissal was automatically unfair because he had made a protected disclosure, and that he had been subjected to detriments for making a protected disclosure. Both the employment tribunal and EAT accepted that he reasonably believed that the disclosure was “in the public interest”. They were satisfied that, even though Mr Nurmohamed was primarily thinking about his own commission, secondary the group of 100 or so managers, were also affected by the issue, who in this case were the “section of the public”.

 

In the appeal on 8 June, the Court of Appeal heard from the employer’s representatives that the tribunal was wrong to concentrate on the number of workers affected. Instead the employment tribunal should have looked more closely at the nature of the disclosure, and not be distracted by the number of people affected. According to the employer’s lawyers, Mr Nurmohamed’s concerns were more alike to a collective grievance, rather than something that was of wider “public interest”. However, Mr Nurmohamed’s representatives maintained that a disclosure should count as being “in the public interest” if it raises matters that are more than purely personal, and the issues are of “some importance” to at least one other person.

 

They argued that a narrow “public interest” test could have the “chilling effect” of discouraging workers from making disclosures in the first place. Mr Nurmohamed’s case was heavily built around the blatant assumption that he reasonably believed that he was making the disclosure “in the public interest”, given the roll on effect on other parties e.g. numerous managers, financial impact of millions at hand, and his assertion that there had been measured wrongdoing.

 

Public Concern at Work, in its submissions at the end of the hearing, highlighted that whistleblowing laws encourage workers to speak out over wrongdoing in the workplace, and whistleblowers need to know that they will be protected when they raise distresses. According to the charity, employers’ whistleblowing policies are conveyed to encourage workers to speak out whenever they see wrongdoing, and policies do not typically tell workers to raise concerns only if they are “in the public interest”. It is significant that Public Concern at Work has intervened. Whistleblowing protection could be harshly restricted if the test for public concern is too strict.

 

Judgement was reserved at the end of the Court of Appeal hearing. It is likely to be a few months before the final judgment is delivered. The Court of Appeal judgment will be binding on employment tribunals and the EAT.

New FCA Reports Shows Another Drop In UK Whistleblowing Cases

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The Financial Conduct Authority (FCA) has released disappointing statistics that show how the volume of employees making whisteblowing claims has dropped sharply throughout the finance industry for a second year.

This result is unfortunately not a positive indication that a lower need for UK workers to address wrongdoing in the workplace now exists, but is rather a reflection of how employees feel a lack of support is available to them should they choose to speak out. The amount of high-profile cases reported by the media in recent months certainly indicates no decline in the need for representation, although only few will gain such a level of exposure.

The FCA’s report details how there were 866 reports of whistleblowing in 2016, a downturn of over 20% from the 1105 reports issued during 2015, which in turn was well below the 1367 registered for 2014.

The FCA report also details how just six of the disclosures the organisation received were considered strong enough to actually result in legal action against an employer, despite 108 other claims being initially deemed solid enough for further investigation. This marks another disappointing drop over 2015 when 199 claims were considered to be of value.

Despite a clear decline, the 2016 result remains a vast improvement compared to the whisteblowing figures of a decade ago. In 2007-08 the number of workers speaking out was as low as 140. Increased media coverage for high-profile whistleblowing cases and a greater level of support for UK finance employees has since encouraged workers to make their voices heard. However, the introduction of tribunal fees in July 2013 led to a universal decrease in employment law cases, of which whistleblowing has been no exception.

Another significant factor harming the volume of whistleblowing cases is recent legislation instructing finance companies with assets of at least £250m to employ a senior manager in the role of ‘whistleblowing champion’. Since its introduction in 2015, this position requires a designated employee to give confidential advice to employees who approach them regarding workplace grievances.

All comments made are disclosed in confidence and the manager concerned must as a matter of protocol refer each report to the whistleblowing services of the FCA and Prudential Regulation Authority. An employee is required to speak with this manager before seeking outside guidance, although some exemptions may be possible.

Such an internal assessment is intended to assist workers as part of a system designed to save both employer and employee the costs amassed through outside referrals while eliminating misunderstanding between both parties where possible.

Although it must be considered that this approach may have an opposing effect, as claims made to an outside source with a potentially more balanced perspective may actually be more beneficial to the worker. Nevertheless, the introduction of whistleblowing champions shows how the UK government is prioritising the need to support employee concerns regarding internal business conduct.

It is often suggested that Britain should adopt an approach similar to that of the US, in which whistleblowers are offered financial incentives for making claims. The belief behind this scheme is that workers will be less likely to worry about the consequences whistleblowing might have on their career if they are financially compensated.

However, critics of the scheme believe it will cause a rise in false claims, which defeats the tribunal fee system’s intention to save taxpayer money by reducing false claims. However, others feel that the scheme will make claimants more likely to gain enough confidence to make a claim. This approach has thus far been generally successful in America, with many new claims getting approved for tribunal hearings.

Mother Suffered Discrimination after Part-Time Return From Maternity Leave

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Many mothers resume work on a part-time basis after having children and employers must be very cautious to ensure that they are not subjected to any unfair detriment. In one case, a woman won the right to substantial compensation after her return to the office was blighted by less favourable treatment.

On returning from maternity leave, the software engineer had been made redundant after her manager reneged on an agreement that she would be permitted to leave at 5:00pm each day to pick up her child from nursery. A new role within the company that she could have applied for as an alternative to redundancy was subject to a requirement that she remain at work after 5:00pm.

After she launched proceedings, an Employment Tribunal (ET) found that she had suffered indirect sex discrimination, harassment and less favourable treatment as a part-time worker. Although the redundancy process was not a sham, the ET also ruled that her dismissal was unfair, having been tainted by discrimination.

In rejecting the company’s appeal against those findings, the Employment Appeal Tribunal could detect no flaw in the ET’s approach. The company’s challenge to a finding of direct sex discrimination – which related to an inappropriate comment allegedly made by a manager on hearing of the woman’s pregnancy – was, however, upheld. The reasoning in support of that finding was deficient and the issue was sent back to the same ET for reconsideration.

Use of Zero Hours Contracts May Fall After Recent Rise

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According to figures released by the Office for National Statistics, the total volume of UK workers employed via zero hours contracts has climbed to a new height of 910,000 during 2016. This is a 14% increase over the figures recorded for 2015, with 105,000 additional workers employed this way. This rise is even more surprising given how just 100,000 UK workers were employed via zero-hours in 2005

Zero-hours contracts are often criticised by employment law experts, who believe they reduce worker rights by not guaranteeing regular work shifts and denying workers the same rights as their fully-employed colleagues.

The increase of workers on zero-hour contracts peaked during the first six months of 2016 before slowing down considerably to 0.8% during the second half of the year.

This sudden change from high to low could be the result of a negative reaction by employers against hiring foreign workers in the aftermath of Brexit, which has made it much harder for EU workers to find UK employment. Another potential reason for the drop might be that employers have seen how zero-hours contracts have come under fire at tribunal in recent months.

Sports Direct was widely criticised after tribunal ruled in favour of a worker who claimed its zero-hours arrangements were unlawful. There has also been a rise in tribunals targeting gig economy businesses, such as Deliveroo and Uber, who have lost high profile cases involving employment rights. Many gig economy businesses plan to appeal their rulings, but a successful review looks uncertain after UK plumbing firm Pimlico Plumbers lost its appeal at tribunal in January 2017.

Many popular British businesses have now changed their contracts. Homebase has ceased its reliance on zero-hours employment and JD Wetherspoon has announced that workers on zero-hours contracts can now extend their employment to full employment if they want.

The Resolution Foundation’s policy analyst, Conor D’Arcy, believes this latter cause to be the contributing factor:
‘The negative publicity these contracts have attracted may well have played a role in their slowdown, as firms rethink their use’.

The financial crisis of 2008 was largely responsible for the rise in zero-hours contract usage, as dire employment prospects made workers desperate for work and therefore likely to sign contracts they would have otherwise rejected. Use of these contracts did not diminished even after the UK economy began to recover, as many employers continued using them despite the potential problems they cause workers.

Unite, the UK’s largest Trade Union, is encouraging the government to outlaw the use of zero-hours contrasts. New Zealand has already enforced this.

Len McCluskey, the general Secretary of Unite, the UK’s largest Trade Union, has stated:
‘There are now close to one million people in the UK on zero-hours contracts. That’s one million people with no job security, who are earning less than people in stable work and who, from week to week, do not know what they will have to live on’.

The government recognises the difficulties such contracts present to workers. Last year Theresa May instructed Matthew Taylor, a former policy member of the Blair administration, to undertake a review into how workers’ rights have been compromised by recent employment law, with zero-hours contracts as a key part of the investigation.

Despite the large amount of criticism brought down on zero-hours legislation, some workers actually value this form of employment. Workers within the age bracket 55-64 make up nearly half of the recent zero-hour increase, largely because many older workers are closer to retirement age and purposefully seek less working hours.

The Resolution Foundation acknowledges that there are some workers who feel they benefit from zero-hours contracts, an that a compromise is required so no-one’s rights are challenged. Conor D’Arcy believes the following:

‘For some of these workers, zero-hours contracts may offer a flexible transition from full-time work to retirement, allowing them to top up their income […] The challenge now is to ensure that these still-popular contracts are reserved for cases of genuine desired flexibility for worker and employer.’

Are you employed on a zero-hours contract? Let us know how you feel about using them in the UK workplace.

Courier Business Criticised For Charging Workers Over Absence

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Further shocking revelations regarding the employment methods of Britain’s gig economy, has shown that self-employed UK couriers who deliver goods on behalf of the firm DPD are being made to pay a fee of £150 for each working day they miss due to illness.

DPD is a renowned company that counts many of Britain’s most popular retailers among its clients, including Amazon, ASOS, Marks & Spencer, John Lewis and River Island.

Workers of the firm are speaking out over an unfair system that forces them to work even when they are sick, unless DPD sanctioned cover can be arranged by the worker for the time spent absent.

DPD is part of the global parcel service Geopost, which has a workforce of around 5,000 couriers; many of whom are self-employed and therefore only receive payment when available to work.

Speaking to the Guardian, a worker who chose to remain anonymous said:

‘I said I couldn’t come in because I was too sick and it wouldn’t have been safe for me to drive. He said: ‘Sorry, I have to charge you.’

The company insists the £150 fee reflects the ‘liquidated damages’ accrues during the loss of a day’s work, and that HM Revenue & Customs approved the scheme

DPD amassed a profit of £100m during 2015 and is expected to grow further as online shopping increases in popularity.

The fee system at DPD has been its standard practice for some time, but is only now being widely documented. This controversy of the contract follows months of tribunal hearings in which other gig economy businesses, such as Uber, Deliveroo and City Sprint, have been forced to grant better working rights to their self-employed staff.

One of the most vocal critics of the scheme is Frank Field, chairman of the Commons Work and Pensions committee, who said the following:

“The gig economy is producing wave after wave of evidence on the grim reality of life at the bottom of Britain’s labour market. A group of companies now controls the working lives of an unknown number of people, and yet evades its own responsibilities as employers and taxpayers by labelling those people as self-employed’.

The average DPD courier is paid £200 per day and will not receive payment for the time absent, therefore when combined with the fee, each daily loss totals £350.

A spokesman for DPD defended the company’s decision to collect a fee from its absent workers:

“Franchisees are contracted to provide a service. If they fail to do so, DPD have to fulfil that service and therefore reserve the right to charge the franchisee for the costs involved in doing so.”

This fee system is believed to have been in operation for several years at DPD but is only now being scrutinised. It also stresses how its couriers receive many benefits from the arrangement, including the right to an average annual wage of £37,000 after a year of service.

Like many other gig economy employers, it’s highly likely DPD will experience further analysis of its contracts to determine whether self-employment rights are being compromised, especially as so many reputable retailers rely on the company for deliveries.

The Trade Union Act 2016 Explained

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The Trade Union Act 2016, which makes a number of changes to the way in which industrial action is organised, came into force on 1 March 2017.

The Act amends the Trade Union and Labour Relations (Consolidation) Act 1992, including Section 226 on the requirement to hold a ballot before any trade union action.

Under the new regime, a majority vote in favour of industrial action will only be regarded as having the support of a ballot if at least 50 per cent of those entitled to vote did so. Different rules will apply, however, before industrial action in ‘important public services’ can go ahead. These include the health, fire, transport and border security sectors, plus public education provision to those age under 17. In such disputes, a further test is to be applied whereby 40 per cent of all eligible union members must vote in favour of the industrial action for it to be legal.

An overview of the Act and information on further changes can be found here.

Rules May Be Rules but Blanket Policies Are Unwise

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Some forms of misconduct may appear so serious that dismissal is the only option. However, one case in which a hospital radiographer was sacked for mishandling confidential patient information showed that blanket policies are rarely a good idea and that room should be left for considering each case on its own facts.

The woman had used confidential information in compiling her defence to a disciplinary charge. The manager who summarily dismissed her took the view that she had shown a complete disregard for the importance of patient confidentiality and that, regardless of any extenuating circumstances ‘a breach is a breach’. Her internal appeal against that decision was subsequently rejected.

In upholding her unfair dismissal claim, an Employment Tribunal (ET) noted that she had felt isolated at the time and was unaware that, by taking steps to defend herself, she was breaching patient confidentiality. By his rigid adherence to the rules, the manager had placed himself in a straitjacket and the appeal procedure had been wholly inadequate.

In rejecting the employer’s challenge to that ruling, the Employment Appeal Tribunal could find no fault in the ET’s conclusion that that the woman’s dismissal fell outside the band of reasonable responses to her misconduct. Other issues in the case, including as to whether the dismissal was also wrongful and whether there had been any contributory fault on the woman’s part, were sent back to the same ET for further consideration.

Whistleblower Finally Wins Case Against HSBC After 13 Years

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After thirteen long years a whistleblower has finally prevailed in his case against HSBC banking group. This ruling will lead to a £4 million financial award getting distributed across 6,700 people who previously held credit cards with either HFC Bank or John Lewis Financial Services; both of which became part of HSBC after a merger in 2003.

Solicitor Nicholas Wilson, 59, has been relentless in his goal of pursuing a case against HFC, which he always stated were responsible for mistreating credit card holders who struggle to make payments.

Mr Wilson of Hastings, Easy Sussex always asserted that the HFC’s actions were illegal in regard to dealing with card charges, and although The Financial Conduct Authority (FCA) reviewed his case on a previous occasion, this second hearing ruled that between 2003 and 2009 clients in debts were indeed subjected to an unfair referral in which their debt was increased by 16.4% of the balance amount, which HFC called a “debt collection charge”.

Mr Wilson “lost everything” in his pursuit of justice against HSBC. He lost his job as a solicitor at the firm he worked for, and now repossession of his personal property is underway. He also believes his whistleblowing caused to him being sacked in 2006 by the law firm he worked for. He asserts that major figures of the financial and political worlds “closed ranks” to protect their own interests from scandal.

His case against HSBC began when he worked as a solicitor to investigate whether HFC were unfairly charging customers. His complaint to the Financial Services Authority, the FCA’s predecessor, was rejected as the organisation ruled the issue was outside its authority.

It was only when Mr Wilson later contacted the Office of the Complaints Commissioner with his concerns that the issue was fully addressed. In December 2015 the Commissioner acknowledged the charges and criticised the FCA for showing behaviour of a “negligent” nature that was “bordering on the farcical”.

Under pressure from the Office of the Complaints, the FCA was forced to conduct a deeper enquiry into the HFC’s actions and found that approximately 6,700 HFC customers had paid all or some of the debt collection fee they were unfairly charged for, and were therefore eligible for protection

The FCA has released information of how HSBC has made voluntary plans for a compensation scheme of £4m to be distributed across those customers who have suffered financially as a result of paying “unreasonable” debt collection charges imposed by the bank’s subsidiaries.

This miscalculation has resulted in approximately 350 accounts being overcharged, leading HSBC to announce that “customers will receive redress where they paid more than the actual and necessary cost of collecting their debt.”

HSBC has also promised to credit these customers with an additional 8% interest. A statement has been released:

“This is a historical issue, dating back to the period between 2003 and 2009. We have revisited the debt collection charge and, as a result, a small number of HFC and John Lewis Financial Services Limited customers may be due a refund. We will be directly contacting these customers shortly.”

For Mr Wilson, this win does not fully reflect the inaccuracy carried of HFC charges. He believes hundreds of thousands of other customers have also been overcharged, although this has been denied outright by both HSBC and government watchdogs.

Following the tribunal hearing Mr Wilson made the following statement:

“After all the abuse and derision about my HSBC allegations, it feels great to be vindicated. But the truth about HSBC is still not acknowledged. There are a great many more than the alleged 6,700 customers. When I left my firm there were 80,000. And that’s just the one firm.”