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Employment disputes update

26 September 2017


No fees for employment tribunal cases

Fees have been imposed on claimants who wanted to take cases to the Employment Tribunal since 2013. The Government’s aim at the time was to deter employees from taking unmerited claims to the tribunal and, hopefully, encourage quicker settlement of employment disputes.

The union Unison challenged the imposition of fees through a judicial review and, on 26 July 2017, the Supreme Court ruled that the original fees order legislation was unlawful because it “has the effect of preventing access to justice”. It went on to say that fees can “be expected to act as a deterrent to claims”. As the fees were ruled to be unlawful from the date they were introduced, the Government has had to refund £27m in fees paid by tribunal claimants since 2013.

It remains to be seen whether the Government will seek to introduce other measures to deter employees from taking unmerited claims to the Employment Tribunal. Individuals who can prove that they were deterred from take cases to the tribunal because of the fees may eventually be given an extended time limit (beyond the usual three months) to bring claims.

 

‘Weekly pay’ may include employer pension contributions

In the Employment Appeal Tribunal (EAT) case of University of Sunderland v Mrs K Droussou, the EAT ruled that the pension contribution that the University made in respect of Mrs Droussou should be included in the amount of weekly pay used to calculate the compensatory award due to her for unfair dismissal.

Under the Employment Rights Act 1996, the meaning of ‘wages’ is defined in s27 as “…any sums payable to the worker in connection with his [or her] employment…”. The pension contributions made by the University were paid directly to the pension scheme and not to Mrs Droussou. However, the s222 definition of weekly pay refers to “…the amount of remuneration for the average number of weekly normal working hours at the average hourly rate of remuneration”. The EAT said that the fact that s222 made no reference to “sums payable to the worker” must be deemed to be intended so that weekly pay must include remuneration of all types whether actually paid to the worker or not.

It remains to be seen whether this case has any wider implications for weekly pay calculations but, as the EAT’s rulings are binding on the Employment Tribunal, it seems likely that employer pension contributions will have to be included in the weekly pay figure used to calculate compensation payments in future employment disputes.

For help and advice on the tax treatment of termination and compensation payments, please contact Stephanie Wilson or Laura Hurrell.

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