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Latest Brief - Week Ending 11 August 2017 

Update on Tribunal fees

There has been an update on the fallout from the recent Unison case, in which Tribunal fees were declared unlawful.   Since the decision, the Tribunal has stopped taking fee payments, both in person and on its online claim form, and it has been confirmed that all claimants will have their fees repaid to them.The Presidents of the Employment Tribunals have now issued a Case Management Order which has the effect of staying all claims or applications brought in reliance upon the decision of the Supreme Court in Unison, to await a decision from the Ministry of Justice and the courts in relation to the implications of this decision.  It appears that this Order is aimed at staying applications by people who want to reinstate claims that were dismissed or struck out for non-payment of fees until the Ministry of Justice and the courts have decided how to handle such cases.  

The wide drafting of the Order means that it may also apply to new claims brought by somebody who may not have brought a claim under the fees regime, but is now willing to do so.  

This is just one aspect of the fallout from this incredibly important decision, and it remains to be seen how the courts and the government will decide to deal with these issues.  

Employer vicariously liable for sexual assaults

In a recent claim against Barclays Bank which involved 126 claims of sexual assault, the High Court has held that an employer can be vicariously liable for sexual assaults committed by a doctor engaged to carry out medical examinations for prospective applicants.  

The court in this case applied the two stage test to determine whether the employer could be vicariously liable in this situation.  The first stage of the test is whether the relationship was one of employment or akin to employment.  The court concluded that the first test had been passed, as the assaults had been committed as a result of activity being undertaken by the doctor on behalf of the bank.  Further, the doctor was under the control of the bank as they could direct what he did, albeit that they did not direct how he should do it.  
The second test to be applied was whether the assaults had a sufficiently close connection to the employment or quasi-employment.  The court held that there was a sufficiently close connection, as the assaults were inextricably interwoven with the carrying out of the doctor's duties.  

Finally, it was fair, just and reasonable to impose vicarious liability, as due to the fact that the complaints had been brought many years after the incidents complained of, this was now the claimants' sole legal recourse.

Latest Brief - 2 August 2017

Holiday pay and voluntary overtime

In an update to the recent judgments on the question of how to calculate holiday pay for staff who work overtime, the Employment Appeal Tribunal has issued a judgment this week on voluntary overtime. 

In the case of Dudley Metropolitan Borough Council v Willetts, the EAT decided that regular payments for voluntary overtime must be included in the calculation of holiday pay.

The Council employees were contracted to work 37 hours per week as their 'normal working hours'.  However, although they were not contractually obliged to work overtime, they regularly volunteered to work extra hours for which they were paid.  The employees volunteered to be placed on a standby rota, from which they could be called on to work additional hours.  In line with European law, holiday pay must correspond to 'normal remuneration'.  The EAT therefore upheld the original Employment Tribunal's decision that the voluntary overtime payments in this case were paid regularly enough and over a sufficient period, as to count as 'normal remuneration. In addition, although being part of the rota was purely voluntary, once an employee was on the rota, he was required to carry out the work if called out.  As such, the EAT considered that the employees were performing tasks required of them under their contracts, even if that was through a separate agreement. So in reality, the work was not purely voluntary and had to be included in the holiday pay calculation.  

Whether voluntary overtime must be counted in the calculation of holiday pay will still be a question of fact and degree. If a payment is exceptional or not regularly paid, it may not need to be included in the holiday pay calculation. However, payments that are regularly made over a period of time, particularly where they are 'intrinsically linked to the performance of tasks required under the contract' are likely to count in the holiday pay calculation.  

Employment Tribunal fees

No-one will have missed the landmark decision of the Supreme Court last week, ruling that Employment Tribunal fees are unlawful, on the basis that they prevent access to justice.  

The decision applies retrospectively and so its effect is that all Employment Tribunal and Employment Appeal Tribunal fees paid since 2013 (an estimated £32M) will have to be reimbursed.  

As the government deals with the aftermath of such a momentous blow, it's still unclear how the large scale reimbursement process will work.  Most of the fees to be paid back will go to employees, but employers should review any fees they have paid, including for Judicial Mediation.  

Going forward, it's likely some form of fee system will be reintroduced, perhaps similar to the current Court fee system, although the government will no doubt need to closely scrutinise any new arrangement to avoid another embarrassment.  Employers should also be mindful of the inevitable upturn in Tribunal claims.

Latest Brief - Week Ending 28 July 2017

Employment Tribunal fees unlawful

The big news in employment law this week (and, arguably for a generation) is the decision of the Supreme Court that the employment tribunal fee regime introduced by the government back in 2013 is unlawful.  Following the introduction of the fees, statistics showed that the number of claims brought dropped by around 70%.  The impact of the decision has been immediate.  The Tribunals are no longer accepting fee payments made in person, and the online system will be amended as soon as possible so that it no longer requires a fee to be submitted with a claim form.

The government has confirmed that all claimants who have paid fees will have these fees reimbursed.  However, this is likely to create significant complications in practice, as Tribunals would routinely order these fees to be paid by the respondent in claims where the claimant was successful.  As a separate issue, many settlements over the last few years have involved the respondent paying a sum equal to the fees paid over to the claimant as part of the settlement.  As a commercial agreement, it is highly unlikely that employers will have any entitlement to claim these fees, even though the claimant has in effect already been reimbursed for these.   

It is also not clear whether those individuals who were put off from bringing claims as a result of the fees will have any redress.  Tribunals have a discretion to extend the time limit for bringing claims if it was 'not reasonable practicable' for the claim to be brought within the time limit (which is the relevant test for unfair dismissal cases), or if it would be 'just and equitable' to allow the claim (which is the test for discrimination cases).  There is a possibility that Tribunals may be amenable to accepting claims lodged out of time if these tests apply to a Claimant's particular circumstances.

One of the key issues identified with the fees was the amount charged for bringing various types of claims, and therefore this decision does not necessarily rule out the possibility that lower fees will be charged in the future.  It may even be that the government will consider introducing a fee payable by the employer for lodging a defence to a claim going forward.  Whatever happens, it is clear that the government will have to go back to the drawing board as far as tribunal fees are concerned, and it is likely to take a long time for the many issues arising from the decision to be fully resolved.  

Consultation on increase to Vento bands 

The Presidents of the Employment Tribunal have issued a consultation statement seeking view on increasing the bands for damages for injury to feelings in discrimination and whistleblowing cases.  When assessing the compensation awarded for injury to feelings in such cases, the Tribunal has regard to three bands, known as the 'Vento' bands.  Currently, cases that are found to fall within the lower Vento band merit an award of between £600 and £6,000 for injury to feelings, with more serious cases falling within the middle band meriting £6,000-£18,000, and the most serious cases within the higher band meriting £18,000-£30,000.  Compensation for injury to feelings is usually awarded in addition to any financial losses that the complainant may have suffered.  

The Vento bands have not been formally updated since 2009, and it is therefore proposed that these bands be increased in line with inflation so that the new bands for injury to feelings are:

Lower band - £1,000 - £8,000

Middle band: £8,000-£25,000

Upper band: £25,000-£42,000 

The consultation will close towards the end of August, and so if these revised bands are adopted, they are likely to apply to cases heard by the Tribunal from around this autumn.