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Employment Tribunal Fees ~ An Update 
 
In a remarkably quick turnaround for the English Legal System, a decision has already been reached and reported in Unison’s most recent attempt to challenge the legality of Employment Tribunal fees. 
 
As we reported last month, the Union returned to the Court of Appeal and argued that the introduction of Employment Tribunal fees was directly responsible for a dramatic decline in the number of cases being heard at Tribunal. Figures produced by the Department for Business, Innovation and Skills show that the total number of claims brought to a Tribunal had fallen by around 70% since the fees were introduced; with claims going from 340,000 in the first three months of the 2013-14 financial year to just over 110,000 in the third quarter of 2014-15. 
 
Lord Justice Underhill, overseeing the hearing commented that the decline in the number of cases was ‘troubling’, but ruled that a case based entirely on an overall decline in cases was not sufficiently robust to succeed. It was the view of the Court that this evidence needed to be accompanied by tangible evidence of the affordability of the fees in the financial circumstances of [typical] individuals; stating that “only evidence of this character will enable the Court to reach a reliable conclusion that the fees payable under the order will indeed be realistically unaffordable in some cases.” 
 
The Court also dismissed Unison’s claim that the fees had a disproportionately detrimental effect on women or those with a protected characteristic, ruling that; “the introduction of the proposed fee structure would not directly discriminate against people with a protected characteristic, because the fee charges would apply to all people irrespective of any protected characteristic; i.e. there is no less favourable treatment because of a protected characteristic.” 
 
Comment: What is curious about this last point is that it refers only to ‘direct discrimination’ and not to ‘indirect discrimination’ and it will be interesting to see if Unison will pursue this point. We are still living in a world where there is a significant ‘gender pay gap’ and in the past more women have worked part-time than men and so this in itself may impact on the affordability issue… 
 
Unison have stated that they now intend to pursue this through the Supreme Court and it would seem that this ruling has potentially opened the door to individuals’, who are unable to afford the fees, to challenge the legality of them. And in a further twist; it has been suggested that the Scottish Parliament may try to utilise increased devolved powers to scrap the fees in Scotland. 
 
It would seem that this story has still not reached its conclusion; so we continued to watch and wait… 
 
The Living Wage ~ Tougher Penalties Announced... 
 
Following on from the earlier budget announcement about the introduction of the new ‘National Living Wage’ with effect from April 2016; the Government has now announced that employers who do not pay their eligible workers will face tougher penalties. 
 
These penalties, also to be introduced from April 2016, will see the current penalty of 100% of the arrears owed being doubled to 200%; though it will be halved if paid within 14-days. The maximum penalty will remain at £20,000 per employee. In addition, employers who fail to make the payments could face disqualification from being a Company Director for up to 15-years. 
 
It has also been announced that the budget set aside by the Government for enforcement will be doubled and a new team established within HMRC to pursue criminal prosecutions for employers who deliberately do not pay their workers what they are owed. 
 
Alongside these announcements the debate about the living wage is raging on… Justin King Chief Executive of Sainsbury’s has stepped into the debate arguing that the ‘living wage is not economically justified and will destroy jobs’; suggesting that employers will seek to make their existing workforce more productive at the expense of creating new jobs. A Government spokesperson has responded that ‘the new national living wage is an essential part of moving to a higher wage, lower tax, lower welfare society’. However, the General Secretary of the TUC has expressed fears that the Living Wage will see older employees edged out of the workforce as employers opt to recruit younger workers who fall outside of the age bracket for the Living Wage… 
 
It will be a while before we see whether any of these concerns come to fruition and we will continue to monitor this and report on any updates as we receive them… 
 
Zero-hour Contracts; in the News again... 
 
Once again zero-hours contracts have just edged their way back into the news arena… Reported on the BBC, the Office of National Statistics (ONS) has reported a 6% increase in the use of zero hours’ contracts by UK businesses in the last year. It has stated that 1.5 million zero hours contracts were used in January 2015 compared with 1.4 million in January 2014; however, it has also added that these results are not ‘statistically significant’. 
 
The ONS has estimated that 744,000 people or 2.4% of those in employment between April and June 2015 were employed on zero hours contracts, up from 624,000 (2%) in the same period last year. However, whilst this represents a 19% year-on-year increase, the caveat attached to these figures remains that it is impossible to distinguish whether the increase is through an actual increase in the number of these contracts in use or just an increased awareness of the use of these contracts following the media frenzy that has grown up around their use… 
 
To Tip or not to Tip; that is the Question 
 
It is the age-old dilemma after a meal out with family or friends; is the service charge included or not – do you pay extra if it is and do you tip because you feel you have to or because you have genuinely received good service… It would seem that the issue of tipping is a much bigger one from an employment perspective though… 
 
Sajid Javid, Business Secretary has called for an investigation into the ‘tipping’ policies of restaurants, after it has emerged that many employers have been with-holding money from staff. Some of the schemes that have come under scrutiny include: 
Las Iguanas who have been criticised for making staff pay back 3% (5.5% in London branches) of the total payments they receive from customers 
Pizza Express who are the subject of a ‘protest’ by Unite for deducting 8% of tips paid by customers on credit/debit card; claiming that the deductions are used to cover the costs of running its ‘tronc’* system . Restaurant chain ‘Giraffe’ has recently scrapped a similar 10% deduction from tips which was used to cover its admin costs. 
 
The investigation, which is due to conclude on 10th November; will examine whether a voluntary code, issued by the Government in 2009 and which advised businesses to detail their gratuities procedure writing, including the details of how the tips are distributed and what deductions are made, needs to be strengthened. It will also examine how gratuities are being treated and will seek opinion on whether the proportion of tips restaurants can withhold should be capped and if so, at what level. 
 
We will monitor this one and keep you posted on how this one turns out… 
 
* A system by which tips are pooled and shared amongst the staff. 
 
Cases of Interest ~ Invalidation of Employment Contract 
 
A timely case has been brought to our attention this month… Reported in People Management and in the Scottish press; it concerns a recent case in Glasgow where a restaurant manager had been dismissed by his employer, Coia’s Café and lodged a claim at Tribunal for unfair dismissal. The reason for his dismissal and his grounds for claiming unfair dismissal are not clear; as the case was dismissed when it emerged that the Manager concerned, Gary Lawlor had been receiving more tips than he was declaring, a practice done in agreement with Café’s owners. 
 
Judge Robert Gail, upon realising this practice was in place, ruled that ‘the case could not proceed, because the [employment] contract was tainted with illegality’. Glenn Hayes, an employment partner at Irwin Mitchell has stated; “as a general rule, it is not the place of Courts and Tribunals to uphold or enforce contracts that are founded on immoral or illegal acts. Their job is to uphold the law, not to help people who break it.” 
 
Hayes continues; “The result of this in the employment context is that if an employee is involved in illegal acts, he will lose many of the legal protections that would otherwise apply to him – in this case the right to claim unfair dismissal.” 
 
The employee is not the only person who has been implicated in this particular case; tips are classed as ‘remuneration’ and as the café owners were aware of the practice of declaring less than had been received by employees, they were in fact avoiding paying the additional tax on this income; which is also against the law. Whilst the employer in this case appears to have been successful in using a defence of ‘illegality’, it is a defence which could very easily ‘back fire’ and result in both employer and employee facing criminal prosecution… 
 
The HMRC guide on Tips and Gratuities can be downloaded here… 
 
And Finally... 
 
The World Cup has arrived... 
 
… For a sport which is not quite as dominant as football, the Rugby Union World Cup will kick off on the 18th September and will run through to 30th October 2015; although the tournament being played out on home turf may well generate increased interest… Most of the matches will be played in the evenings or on weekends; but there are a few scheduled to take place either at 2 30 pm or 4 45 pm on weekdays and this will inevitably lead to questions from employers on how to deal with employee absence during this time. 
 
There is no obligation on employers to accommodate requests for time off work for employees wishing to watch matches, nor is there any obligation on them to provide facilities within the workplace that allow staff to watch matches whilst at work or on work premises. However, there is an argument for making provisions which recognise that there is likely to be an increased number of employees wanting to take time to watch these matches and it is better to proactively manage the situation than to react to it. 
 
There are a few ways in which quick wins can be achieved for both the employer and employee in these circumstances; for instance where the nature of the service/business of the Company permits, allowing staff to work flexibly on match-days i.e. coming into work early and leaving early or working through lunch breaks. Alternatively, employers may consider putting TV screens into offices or communal rest areas and allowing staff, particularly those working evening/night shifts, to watch matches in a supervised/controlled manner. 
 
Obviously some employees may submit a request to take annual leave and in this instance, employers should manage these as they would any normal request for annual leave; ensuring that they are handled fairly and equitably for all staff making such requests. 
 
Sadly, there is also likely to be some employees who decide to ‘play’ the system in order to get time off work by calling in sick… In these cases, employers are entitled to request a ‘first day certificate’ from employees; though where the employee has to pay for such a certificate, the employer should reimburse them and not leave them out of pocket. If planning to impose such a procedure for the duration of the World Cup, employers should ensure that this is communicated widely to all employees. 
 
The saving grace is that this particular sporting event only comes around every 4-years; though it is mixed with other major sporting events such as the Olympics in 2016. However, it is key to remember that the manner in which employers choose to handle each of these events individually should not create any precedent for any future events as they happen and employers can, for the avoidance of any doubt, explicitly state that any provisions they are making for the Rugby World Cup are for this event only. 
 
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