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News & Blog

Employment Law Newsletter – October 2013

The Cost of Tribunal Claims

Former winner of ‘The Apprentice” Stella English has successfully defended Lord Sugar’s claim for legal costs of £50,000 after she failed in her claim of constructive dismissal against the business mogul. This was despite the fact the original tribunal stated that the case should never have been brought. The panel considering the costs application felt that the original claim was not motivated by malice or bad intentions and that she genuinely believed she had a case.

These legal costs may be spare change to Lord Sugar, but this serves as a reminder to employers to review the benefits of continuing to defend tribunal proceedings in even the strongest of cases. The cost of defending claims can be significant, both in terms of legal fees and management time, and it is always advisable to consider whether settlement might be in the best of interests of the business.

Accrued Holiday Pay – How Much Do You Have to Pay?

In Podlasiak v Edinburgh Woollen Mill Ltd [2013] the Tribunal confirmed that when making holiday payments on termination any calculation must reflect the normal pay the employee would have received had they exercised their right to take holidays during employment. Whilst the relevant regulations include a statutory formula which provides for this by calculating accrual on a daily basis up to termination, they also allow employers to use other calculations as may be contained in a ‘relevant agreement’ such as a Contract of Employment. This potentially permitted employers to pay less than ‘full’ entitlement as long as some payment was made, and in this case the contract of employment provided for payment of £1. This was however deemed unlawful.

As this decision potentially overturns the previously accepted position, or at least seems to close the ‘loophole’, it is advisable to review your contractual provisions on holiday pay to ensure they remain compliant. There are other lawful methods of limiting large payments of accrued holiday on termination and if you would like us to review your arrangements or provide further advice please contact a member of our employment team.

The Importance of Impartial Grievance Processes

The Employment Appeal Tribunal has recently confirmed that an employer’s failure to provide an impartial grievance appeal process (by allowing an employee to appeal to a different manager than the one who had heard the original grievance) could amount to a breach of the implied term of trust and confidence and form the basis of a constructive dismissal claim.

The EAT’s decision warns employers that the right to an impartial appeal is an important feature of the ACAS Code and a fair procedure. It also highlights the importance of seeking advice before instigating disciplinary or grievance procedures to ensure they are conducted properly and to avoid claims.

Fee Remissions Systems

Recent changes to the tribunal system have seen the introduction of tribunal fees, which Claimants must pay at the outset of a claim, and at the hearing stage.  In certain circumstances claimants who would have difficulty doing so may not have to pay the fees and can apply for a fee remission. A new fee remission regime will come into force on 7 October 2013.

In September, the Ministry of Justice also published its response to a consultation on reforming the fee remission system. This confirmed the government’s intention to introduce a disposable capital test and a household income test, both of which would have to be passed for an applicant to be eligible for a fee remission. Applicants will have to provide substantial documentary evidence in support. We are hopeful that the introduction of Tribunal fees and the fee remission application process will help reduce the number of spurious or unmeritorious claims.

For any further information or guidance on any of the above issues, please contact a member of our employment team.

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