Have the Government Made Another Mistake on ET Fees

In the Judicial Review brought by Fox and Partners in the Court of Session in Scotland in respect of employment tribunal fees, the Lord Chancellor conceded that Equal Pay claims were type A claims for the purposes of the Fees Order because they are complaints in relation to a breach of the sex equality clause  in terms of section 66 of the Equality Act 2010. This is despite the Fees Order saying they were Type B claims attracting the higher fee on issue and hearing.  It was suggested this was a drafting error and Ministers would want to amend the Fees Order.

I think I may have spotted a further drafting error.  I recently chaired a working party for the Employment Lawyers Association responding to the ACAS consultation on amending paragraphs 15 and 36 of the code of practice on Discipline and Grievance following the EAT decision in Toal and another v GB Oils Ltd UKEAT/0177/13DM.  If you are interested, you can find our response here http://www.elaweb.org.uk/sites/default/files/docs/ELA%20Response_ACAS%20consultation%20on%20Code_Discip_Griev_7Jan14%20%282%29.pdf

It is necessary for the Chair of the Association to approve any response before it is submitted.  He approved our response but asked me whether a fee was payable to bring a claim under Section 10 of the Employment Relations Act 1999, where an employer refuses to allow a worker to be accompanied by a companion of their choice at a grievance or disciplinary hearing.  I knew the answer to that was “yes” but I couldn’t answer the follow up question which was what was the level of fee.  I always assumed it was a type A claim.

I went to the fees order and was very surprised to see the claim was not listed in Table 2 of Schedule 2 as a type A claim, attracting the lower fee of £160 on issue and £230 for hearing.

This means that an worker wishing to bring a claim under S.10 of the Employment Relations Act 1999 must pay an issue fee of £250 and a hearing fee of £950.

Bearing in mind that the remedy for breach is compensation of an amount not exceeding 2 weeks pay and a weeks pay has the usual maximum of £450, a worker will have to spend £1200 to get back £900.  Of course, if they succeed they should have their fees paid by the losing party, but this is not automatically the case.

But it is worse, as a result of the decision in Toal  we now know that the word “compensation” in S.11 (3) of the Employment Relations Act 1999 requires the worker to prove they have suffered actual loss and nominal damages may be appropriate where no actual loss can be proven.

Type B cases are meant to be the more complex and costly claims.  I cannot believe the Government assessed S.10 claims are complex and so more costly.  Currently, who is going to speculate £1200 to win a maximum of £900 in compensation?  The right under S.10 becomes meaningless.

So is this a further example of the rushed nature of introducing the legislation on employment tribunal fees last July leading to errors in drafting?  Will the MoJ agree to remedy the error in the same way as they did with Equal Pay claims?

NMW ‘naming & shaming’: Vince Cable gives hostage to fortune

You may by now have forgotten – always assuming you noticed in the first place – that, last Wednesday, Labour devoted one of their precious Opposition Day debates to the National Minimum Wage (NMW).  And you’d be in good company, for the entire Labour front bench seem to have done their best to forget it too.  And with good reason.

The most obvious reason is George Osborne’s brilliantly-timed NMW coup on Thursday evening, which seemed to catch shadow ministers not just napping but comatose.  And the real genius of Osborne’s strike was in crudely tossing aside the 15-year-old political pact that setting the NMW rate will be left to the Low Pay Commission (and, bar a few growls from the CBI, getting away with it).  For Osborne knew Ed Miliband couldn’t use his set-piece speech on the economy the following day to launch a counter-attack – “I’ll see your £7.00 per hour, George, and raise you £7.50 per hour”, perhaps – without the trade unions throwing their toys out the pram.

But even before Osborne launched his coup via Nick Robinson and the BBC, shadow work and pensions secretary Rachel Reeves, who kicked off Wednesday’s debate, had blasted both barrels of her shotgun through Labour’s own feet by launching a puerile and ill-informed ad hominem attack on business secretary Vince Cable, over his non-attendance at crucial votes on the then National Minimum Wage Bill in 1998.  An admirably restrained Cable initially declined to rise to the bait, but when he did it was both dignified and devastating:

Vince Cable: The Honourable Member for Leeds West [Rachel Reeves] made a great deal of the fact that, as she put it, the Conservatives opposed the national minimum wage and many Liberal Democrats opposed it. She speaks with all the self-confidence of somebody who was not here at the time.

Chris Bryant (Labour): You were and you didn’t vote.

Vince Cable: I did not particularly wish to raise this, but I am being asked personally to explain why I did not vote [in 1998]. It had a lot to do with the fact that my late wife was terminally ill at the time and I was in the Royal Marsden hospital. That is why my voting record at the time was poor on that and other issues.

As Isabel Hardman noted in a scathing Spectator blog post the following morning, “it’s not the first time someone has made the mistake of assuming that non-attendance at a vote has a sinister rather than sad explanation, but it rather blunted Labour’s attack on the Liberal Democrats” and was “all the more surprising given [Labour’s] recent rage over a Sun article describing Lucy Powell as ‘lazy’ when she had in fact been on maternity leave”.  Both Reeves and Chris Bryant later apologised to Cable.

For Labour and the hapless Reeves – who must surely be looking for a new researcher – it was all downhill from then on, and I’d be very surprised if anyone in Labour ever mentions this car crash of a debate ever again.  Cable was even able to parry Labour’s pledge to increase the civil penalties for non-compliance with the NMW (or ‘fines’, as shadow ministers wrongly insist on calling them) by confirming plans, first announced by the Prime Minister in November, to substantially increase the penalties from next month.

However, before sitting down Cable himself made a comment that I suspect may also come to be seen as something of a mistake.  Without having been pressed to defend the fact that only one employer has been ‘named and shamed’ for non-compliance with the NMW by his department since he introduced the practice in January 2011, the business secretary volunteered that “new guidelines for the naming and shaming process were issued to HMRC in October” – as indeed they were.  And he went on to say:

“There is also the question of due process.  Companies that are about to be named and shamed can appeal, and it is estimated that that process takes roughly 150 days.  I imagine that a significant number of cases would begin to emerge by the end of February; we can test that when the issue arises.”

The new guidance issued to HMRC in October under “revamped plans to make it easier to clamp down on rogue businesses” is certainly wider in scope than the original, clearly duff scheme.  According to the BIS press release at the time, “the revised scheme will name employers that have been issued with a Notice of Underpayment (NoU) by HMRC. This notice sets out the owed wages to be paid by the employer together with the [civil] penalty for not complying with minimum wage law”.  And, every year, HMRC issues some 700 NoUs.  So, were every employer issued with a NoU to be ‘named and shamed’ under the new scheme, then allowing for Cable’s 150-day due process we might indeed expect a first tranche of some 60 employers to be ‘named and shamed’ in late February or early March.

However, shortly after this revamp of the naming and shaming scheme came into force in October, the BIS employment relations minister, Jo Swinson, let slip on Twitter (in an exchange with the magnificent @HRBullets) that employers will not be ‘named and shamed’ via some kind of central, publicly-accessible register, as one might reasonably expect, but “through [BIS] press releases to maximise coverage” in “local [and] regional newspapers”.  So, either BIS will be issuing an awful lot of ‘naming & shaming’ press releases each month, or it will be releasing one or two press releases each containing the names of dozens of employers.  And, frankly, neither scenario sounds terribly likely to me.  Certainly, Jo Swinson didn’t take the opportunity provided by the Twitter exchange to confirm that all employers issued with a NoU by HMRC will be ‘named and shamed’ by BIS.

Whatever, as Vince Cable says, come the end of February, we will be able to test the issue.  And I will be very happy to be proven a cynic.

Postscript: Since posting the above, I have come across this written statement by Jo Swinson’s maternity cover, Jenny Willott, in the House of Commons yesterday in response to a PQ by Paul Maynard MP:

The revised NMW Naming and Shaming scheme which came into effect on 1 October 2013 made it easier to name employers that break national minimum wage law. By naming and shaming employers it is hoped that bad publicity will be an additional deterrent to employers who would otherwise be tempted not to pay the NMW. We anticipate naming employers very soon.