How will the Supreme Court ruling on tribunals affect employers?
Employment tribunals in England and Wales and Scotland deal with disputes between employer and employee. Their scope also extends to aggrieved job applicants. From 2013 until July 2017 those bringing an employment tribunal claim had to pay up to £1,200 per claim. In July this charging regime was ruled unlawful by the Supreme Court, meaning that fees are no longer payable.
By introducing fees, vexatious tribunal claims reduced, removing the burden placed on business to defend such claims. The introduction of fees met the Government’s aim; tribunal claims fell by 70%. Tribunals were able to concentrate on more serious and founded claims, where a plaintiff was able to pay to bring the case.
The GMB union argued successfully at the Supreme Court that this was unfair to those on very low incomes. They were the very people, it said, who were exploited and who needed access to justice.
The GMB argument prevailed. Now the decision to introduce fees has been reversed.
So, what does this ruling mean for you as an employer? If you are a reputable employer, managing your employment obligations within the law, you won’t see any difference. If you are an employer who ignores your employment obligations then you are likely to see claims (or more claims) being brought against you.
There is an abundance of articles circulating on the web that suggest that employers should return to the Donovan principles whereby workers have ‘easily accessible, informal, speedy and inexpensive justice’.
But what does a return to the Donovan principles mean?
By removing fees, the dual aim of easy accessibility to inexpensive justice is met. But just because there are no fees does not mean access to informal and speedy justice. Employment tribunals are neither informal, nor are they speedy.
In principle, all grievance could move from tribunal to company procedures. Justice, if that’s what is achieved, would then be informal and speedy. If an employee has easy access to grievance procedures, issues could be dealt with quickly. But if justice is to move indoors, management needs to be perceived as just – particularly since often the grievance is against management itself. Justice, in employment terms, is about employees believing that they will be treated equitability and fairly by management. They have to believe that they will get justice; that there’s no need to go outside.
Research shows that employees trust firms they perceive as ‘just’. There is significant evidence that these ‘high-trust’ firms benefit from increased commitment, productivity and economic growth. There’s significant benefit for management striving to be just.
So how does management create a ‘high-trust’ firm?
It’s simple really. In the ideal world the implementation of sound people management strategies should negate the need for employment tribunals – or at least should negate the need to take all but the most serious claims where trust has broken down.
It means having sound people management as part of your firm’s core strategy.
It means considering how you manage and develop your people and how you communicate with them. Building a high-trust environment is not easy – but many firms across the UK achieve just that. Staff in these firms know they can rely on an internal, easily accessible, informal and speedy justice system.
The Donovan principles are laudable, but they ignore the premise that any justice system must also be fair. To achieve high trust, fairness must be apparent in all aspects of your people management practices.
Access to employment tribunals has now become easier. But you can still settle any grievances internally and reap the benefit of high trust. You just need to implement a sound people-management system.
You can carry out a health check of your current practices to determine what areas of your people management practices you might want to improve. It will take you a few minutes and you’ll get a summary report across your people management strategy.
So, what do we take away from the repeal of tribunal fees?
On the face of it, the threat of your people taking more claims has risen. So you would be wise to provide for this.
But you can make justice accessible and informal and reap great benefit. If you do, the news that tribunal fees have been removed will be of no concern.
Don’t assume that since the chance of an employee taking a claim is low, you’ll do nothing. There’s too much to gain from creating high trust.