The current system allows members of your staff to make a claim against you for matters such as breaches of contract and unfair dismissal without paying a fee to do so. Disgruntled barstaff may even be encouraged to pursue a baseless claim as there are generally no cost implications, for them at least, even if you are ultimately successful.
The Ministry of Justice has stated that it is unfair for the taxpayer to foot the entire £74m bill for people to escalate workplace disputes to the tribunal and that individuals should make a contribution.
Many commentators accept that the purpose of the new fee system is not to fill the Government’s dwindling coffers, but to reduce the number of frivolous claims. While this may be good news for operators I fear that any potential long-term benefits may not be so obvious or long lasting.
Some have argued that it is unfair to charge a staff member on minimum wage £160 to pursue a claim for a similar amount in unpaid wages. The Court of Session in Edinburgh has recently granted a full hearing later this year to assess the legality of the Ministry of Justice’s fee proposals and the Government has agreed to repay fees should it eventually lose that case.
From today (29 July) your staff member will have to pay several rounds of fees if they wish to pursue the matter all the way to a hearing. The current fee remission system used in civil court proceedings will be extended to employment tribunal matters and will assess your staff member’s disposable capital and gross income.
Robust policies
As an example, a typical unfair dismissal claim will now have an initial fee of £250 and a further hearing fee of £950. Tribunal judges will have the discretionary power to order costs against the losing party, although this is by no means guaranteed.
While the introduction of fees may reduce the number of claims, of course the most effective strategy for operators to protect against frivolous claims is to implement robust policies and have a basic understanding of their employees’ rights. For unfair dismissal claims, for example, there must be a contract of employment (written or verbal) and your employee must have had at least one year’s service if the employment commenced before 6 April 2012, or two years’ service otherwise.
Be aware of statutory minimum notice periods — staff members with continuous employment of one month to two years require at least one week’s notice period. Those with more than two years’ continuous employment are entitled to one week’s notice for each complete year of employment, up to a maximum of 12 weeks. If you decide that dismissal may be appropriate, a fair reason must be established and you must act reasonably.
Always follow a fair procedure and explain to your staff member that they are at risk of dismissal and why. They should also be given sufficient time to discuss the matter with you and make representations. A right of appeal may also be appropriate; as a rule, the Advisory, Conciliation & Arbitration Service Code of Practice 1 — Disciplinary & Grievance Procedures is a useful guide for acting reasonably in disciplinary situations.
Vexatious claims
Despite the existing regime encouraging vexatious claimants, operators have at least had the security of knowing that a relatively small settlement offer may be enough to see off a spurious claim. The advent of these new charges, however, may present a different picture: you could be faced with a member of staff who, having expended significant sums in tribunal fees, is financially committed to his case, regardless of how unlikely it may be to succeed. That type of claim still needs defending and will cost you money.
So while these new proposals may deter some of the more faint-hearted claimants they may harden the positions of others. All the more reason to have a rigorous and up to date grievance and disciplinary procedure.