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Employment tribunals – will Matthew Taylor’s review help?

11.07.2017

Employment and the world of work is a hot topic for public debate at the moment – and today, the talk is all focused on Matthew Taylor’s report into improving working practices, fittingly titled ‘Good Work’.

So should we be saying ‘good work’ to Matthew Taylor after the conclusion of his review?

The report is wide-ranging and looks at everything from tax to sick pay. Interestingly, it also suggests a new working status – a ‘dependent contractor’, which would give additional rights to people who aren’t employees but have a close working relationship with a company.

In particular, the section of the report we were keeping our eyes open for were the reforms to employment tribunals that have been hinted at in the press already. Now that we’ve seen the report, here are some of our thoughts.

Employment tribunals – righting an imbalance

Employment tribunal fees were introduced in 2013 and can cost as much as £1,200 for an unfair dismissal claim to be issued and heard. This is on top of legal fees and other costs involved in bringing a claim.

This means that for employees, taking your employer to a tribunal is already a risk. If you win the tribunal, then there’s a good chance you’ll be awarded more money than you’ve had to spend in bringing the claim, even though you can’t recover your legal costs. If you don’t win, then you will have paid the tribunal fee for nothing.

However, there’s an extra danger if you aren’t certain of your status as a worker or employee, which is that the tribunal may decide that you aren’t eligible to make a claim at all, due to the nature of the relationship between you and the company you work for, and by that time you have already paid the fee.

Matthew Taylor’s suggested solution to this is for tribunals to decide a person’s employment status before the fee needs to be paid. He also suggests ‘flipping’ the burden of proof so that it is up to companies to prove that someone is not an employee, rather making individuals prove that they are employed. This would hopefully remove one layer of risk involved in ‘gig’ workers taking legal action against exploitative companies.

Employment tribunal fees have clearly put off a number of people from making claims – including many which would be successful. The report suggests a solution: tribunals could provide an increase in the money awarded to workers who sue companies which have already lost a tribunal hearing because of a similar complaint. This might incentivise more people to enforce their rights.

It also proposes heftier fines for companies which don’t reform their employment practices. As things stand, if a worker (such as those in the Uber judgement) uses an employment tribunal to enforce their rights, their employer isn’t obliged to extend those rights to other workers – each worker would have to take legal action individually for this to happen.

Extra fines on top of damages could encourage employers to change a ‘dodgy’ employment practice more quickly when it’s already been challenged successfully at a tribunal.

The reality though is that tribunal fees continue to be prohibitive for employees, often to their employer’s benefit. As employment solicitors, we inevitably have to advise our clients tactically on whether they would be financially better off resolving an employment dispute through a settlement agreement rather than a tribunal.

This may be in their best interests, but the lack of a formal tribunal makes it much harder to impose the suggested fines on unscrupulous employers. That said, even the additional threat of these may make it easier for employees and their solicitors to reach a settlement agreement without a hearing – time and the Government’s response to the report will tell.

Further information

For more information on employee rights, tribunals and settlement agreements, visit our employment section. To speak to an expert employment solicitor in Bristol or South Gloucestershire, call us on 0117 325 2929 or complete our online contact form.

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