Guidance for employers on the claims process, tribunal hearing and settlement of claims
Here we list a selection of key cases on employment tribunals, providing a summary of the decision and implications for employers.
R (Unison) v The Lord Chancellor | Supreme Court | 26 July 2017
Issue: Employment tribunals – fees
In early 2014, Unison brought judicial review proceedings in the High Court claiming that the introduction of fees in 2013 denied potential tribunal claimants access to justice and was discriminatory. Prior to the fees’ introduction, access to the employment tribunal system had essentially been free since the 1970s.
The trade union alleged that the fee system prevented genuine claims against employers and had a discriminatory effect on certain protected groups such as women, ethnic minorities and disabled workers.
Unison was initially unsuccessful in the High Court, and at the Court of Appeal, for a number of reasons, including insufficient evidence being available at the time to assess the full impact of the fees regime. However, permission was granted to appeal to the Supreme Court.
In July 2017, the Supreme Court delivered a landmark judgement, deciding that the fees were unlawful under both UK and EU Law, because they prevented access to justice. The evidence collected showed that the fees had led to a dramatic fall in the number of employment tribunal claims over the four years since they were introduced. Figures from the Ministry of Justice revealed that the number of single claims made to employment tribunals had fallen by 72%.
In particular, the fees were indirectly discriminatory under the Equality Act 2010, because the higher fees applicable to Type B claims (such as those involving equal pay) put women at a particular disadvantage, since a higher proportion of women bring such claims than bring Type A claims (such as those for unfair dismissal).
Implications for employers
The employment tribunal fee system operating from July 2013 to July 2017 has been found to be unlawful, with the result that the government has stopped charging fees in both employment tribunals and the Employment Appeal Tribunal. The on-line tribunal submission portal has been changed accordingly.
While tribunal claims are now likely to increase, the new system of Acas early conciliation introduced alongside the fees has encouraged settlement, and this may help prevent claims reaching quite as high a level as that which existed before July 2013. Also, the case does not mean that charging any tribunal fees is unlawful. The government could introduce a new system, perhaps with lower fees, payable both for bringing and defending claims.
For the time being, the absence of fees during Acas early conciliation, and any direct negotiation between employee and employer, will make threatened claims more likely to proceed, which in turn will have an impact on employers' financial offers and negotiating tactics.
Throughout the Unison case, the government argued that the fees were lawful, but promised if it lost the case, that all the fees raised over the last four years would be reimbursed. The government has confirmed that it will keep this promise. The sum involved is reported to be around £32 million.
The fees will be repaid under a refund scheme, yet to be announced. In some cases, the tribunal fees can just be directly repaid to the employee. In other cases, for example, where the employee won his or her claim, the employer may already have reimbursed tribunal fees to the employee as part of the compensation paid. The government may reimburse the employer in these situations. However, it is not clear if fees reflected in amounts paid by employers under settlement agreements will be repayable.
Some employees will have been deterred from bringing claims between 2013 and 2017, and it is possible they may sue the government for compensation accordingly. It is also possible that employment tribunals will be asked to allow for the late submission of claims (outside the normal three-month time limits) if an employee was deterred from making a claim in time because of the fees.
Organisations should always focus on preventing claims; better people management can help to defuse conflict before it escalates. They should also co-operate with Acas early conciliation, and any other alternative employment dispute resolution methods, so that litigation is not the preferred option.
Thomas v Nationwide Building Society | Employment Tribunal | 16 Oct 2014
Issue: Acas early conciliation – claimant had failed to participate
An employee of the Nationwide Building Society brought a claim (on form ET1) about a detriment for making a protected disclosure (a whistleblowing claim). Her solicitors did not get an early conciliation certificate number but (wrongly) stated that the claim was exempt from early conciliation.
The employer said that the ET1 should have been rejected as the employee should have undertaken early conciliation. Her solicitors accepted that the claim was not exempt from early conciliation as they had said on the form. However, they tried to get the proceedings stayed so that the employee could commence early conciliation retrospectively.
Before the matter was resolved, the employee had contacted Acas, submitted her early conciliation application and obtained a certificate of compliance. It had to be decided if she could proceed with the claim although she had only retrospectively complied with the early conciliation requirements. It was in her interests to proceed with the original claim because there were issues about time limits which made it advantageous to pursue the original claim.
The Employment Appeal Tribunal therefore held that her claim should not be rejected as the rejection was based on a defect that had since been rectified, now that she had the certificate. The claim form could be treated as if it had been presented at the time the early conciliation procedure had finished.
Implications for employers
- New early conciliation procedures were introduced on 6 May 2014 requiring that employees must get a certificate before being able to proceed with their claim in an employment tribunal.
- This case is one of the first to consider the early conciliation rules which aim to encourage the parties to consider settlement at an early stage.
- Employers should examine the details of the claim form carefully, checking time limits and conciliation issues. If the claim should not have been accepted in the first place, this should be raised without delay with the employment tribunal.
- However, raising technical points as in this case will increase employers' legal costs.
- If an employee fails to follow Acas early conciliation this does not necessarily stop the claim being pursued in the employment tribunal.
- An employer may win a challenge to the validity of a defective claim, but if there is sufficient time before the time limit expires, the employee may be able to rectify the defect.
- The employment tribunal can use the re-consideration provisions of the employment tribunal rules to treat the claim as having been presented at the end of early conciliation, even though conciliation was only started after the original claim was filed.
- Employees can therefore effectively rectify some defects in an ET1.
- A defective claim like this one will be rectified when the early conciliation certificate is finally issued with the early conciliation number.
- An employee with a defective claim can therefore avoid paying a second issue fee.
Ravat v Halliburton Manufacturing and Services Ltd (Scotland) | Supreme Court | 18 Feb 2012
 UKSC 1
Issue: Employment tribunals – jurisdiction
A UK national who lived in Great Britain was employed by a British subsidiary of the Halliburton group. He worked for 28 working days in Libya, then 28 days home in Great Britain. The work in Libya was for a German part of the group of companies, but he reported to management in Egypt. The relevant human resources departments were in Great Britain and Libya. He was on his British salary and benefits package and paid in sterling into his British bank account, He also paid British income tax and national insurance contributions.
He was made redundant and claimed unfair dismissal in the British employment tribunals. The Supreme Court eventually held that Great Britain had jurisdiction to hear his claim on the basis that the substantial connection between his employment and Great Britain brought the claim within the scope of the Employment Rights Act 1996 (ERA 1996).
Implications for employers
- There are no longer any provisions in the ERA 1996 which limit the territorial extent.
- Therefore employers with employees working overseas whose employment has a substantial connection with Great Britain can be presumed to fall within its scope.
- The leading case of Lawson v Serco Ltd  IRLR 389 identified categories of employees falling within the scope of the ERA 1996: employees posted abroad for the purpose of a business carried on in Great Britain; mobile employees whose base is in Great Britain; and employees working in a British enclave overseas, for example at a British diplomatic mission or military base.
- This case and previous decisions show that there is another category of employment, namely those with a ‘substantial connection’ to Great Britain.
- Employers with staff who carry out all their work outside Great Britain can still bring claims of unfair dismissal in Great Britain if there is a ‘substantial connection’ to Great Britain.
- The ‘substantial connection’ can be based on numerous surrounding factors even in the private sector.
- It is hard for employers to predict if there is British jurisdiction in any particular factual scenario, so if employers wish to choose or avoid British jurisdiction they should consider including an express choice of law and jurisdiction in the contract of employment.
Kelly v University of Southampton | Employment Appeal Tribunal | 6 Jul 2010
Issue: Employment tribunals – mitigating loss
A lecturer who was a US citizen was dismissed due to her employer’s mistaken belief that they were illegally employing her once her work permit had run out. (Her leave to remain in the UK had expired and the university was concerned that it might be employing her illegally. However in the meantime she applied for indefinite leave to remain in the UK which was granted.) The dismissal was found to be unfair and wrongful and the case was sent back to an employment tribunal for an assessment of her compensation.
The tribunal and the Employment Appeal Tribunal held that the lecturer had failed to mitigate her losses by not applying for either of two vacant posts in the department where she had previously worked and a number of posts at other universities which she had identified. It concluded that she would have been appointed to one of the two posts by June 2005 had she applied and therefore her loss of earnings should be up to that date. The employer was correct in insisting that she applied for the two vacant posts through the proper channels and if she had,she was very likely to have been successful in being appointed to one of the posts.
Implications for employers
- Employers must at the very least ensure that all employees have permission to work in the UK. If this permission is temporary, employers may wish to keep abreast of their employees’ immigration status before problems arise rather than afterwards.
- Employers should retain evidence showing internal vacancies which the employees in such circumstances could apply for.
- It is for the employer to establish that an employee has not taken reasonable steps to alleviate the loss and so employers should always be prepared to show that employees have failed to mitigate their loss so any award can be reduced.
Please note: While every care has been taken in compiling these notes, CIPD cannot be held responsible for any errors or omissions. These notes are not intended to be a substitute for specific legal advice.