Legal

Will the tribunal system cope with employment status challenges?

7 Feb 2019 By Esther Smith

The already creaking employment tribunal system will have to take on an extra caseload predicted to stem from planned government reforms to employment rights. Esther Smith reports

The sharp increase in the volume of tribunal litigation since the removal of the fee regime in July 2017 has been well documented. The most recent figures published in December 2018 confirm that the number of single tribunal claims increased by 31 per cent year on year in the quarter July to September 2018, with the outstanding caseload increasing by a staggering 77 per cent. 

These figures demonstrate not only the increasing number of claims being brought, but also the lack of available resources to adequately manage this. New tranches of employment judges have been recruited and are due to start sitting in phases throughout 2019, but the system simply can't cope with the current workload. 

There are significant delays in getting cases listed for hearing (with some regions already listing multi-day hearings into 2020) and the tribunal regularly calls the day before a hearing to confirm postponement due to lack of judicial resources. This situation incurs unnecessary cost on both sides, and also increases the stress on those attending as witnesses, including claimants. The passing of time also creates practical issues in presenting – or more likely defending – cases. It is often a struggle to find witnesses who remember anything so historic, or indeed who are still employed by the company.

Many employers are already dealing with an increase in claims, and anecdotally it seems the majority would probably not have been brought had the fee regime remained in place.

The Good Work Plan 

On 16 December, the government announced its Good Work Plan in response to the Taylor review – a series of proposals to ‘upgrade’ workplace rights and get work “right for British workers and businesses”. While many would not take issue with the principles stemming from the Taylor review – including recognition that employment law and tax regimes need to reflect modern working practices – implementing new provisions will undoubtedly give rise to more litigation, and it's in everyone's interests to ensure the legal system can cope.

The government has confirmed it will legislate to improve the clarity of the employment status test. This sounds straightforward enough, but given that statutory employment rights are determined by an individual's status, wider thought must be given to the overarching employment law framework when thinking about legislating on status. 

There is discussion as to whether ‘worker’ status will be rebranded as ‘dependent contractor’, although the government has not committed to implementing this or commented on whether the same employment law provisions would automatically apply. 

Even with the current legal provisions, there is a lack of consistency. A good example of this is in relation to whistleblower protection. While an employee who is dismissed for having made a whistleblowing complaint has protection against unfair dismissal, the protection against suffering a detriment applies to ‘workers’. However, this definition of worker is wider than that used elsewhere. The breadth of the definition comes both from the wording of the legislation and case law, with the Employment Appeal Tribunal ruling that workers in this sense can include individuals providing services through personal service companies.

This demonstrates the complexity of our current provisions, before any legislative measures are introduced to re-categorise employment status. 

Looking forward 

The current tribunal system does not have the capacity to deal with a new volume of work to determine status under any new provisions; nor to deal with the resulting second stage of any such claims to determine which statutory employment provisions apply to which category of individual.

Perhaps rather than a piecemeal approach to addressing status, it is time for a wholesale review of employment law in the UK – something that some say is long overdue. It is not clear, however, if this would in turn reduce the volume of tribunal claims and solve the issues we are seeing in the system today. 

Simplification may result in fewer disputes but, in reality, history has shown that a fee regime has a much greater impact in reducing the number of claims, and the government has hinted it is considering this. We may see a new fee system (ideally one that scales fees to the value of a claim, resulting in proportionality as well as making claimants realistically assess their claim's value at an early stage) before we see a wholesale review of employment law.

Employers should follow the government's proposals and fee discussions closely, and ensure they understand the full potential impact of any changes to the law – from contracts and employee management to the risk of a dispute and what happens if a claim is brought. 

Esther Smith is a partner at UK law firm TLT

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