The next two weeks is likely to see the sharpest increase in the number of claims being submitted to the Employment Tribunal than at any time since the introduction of the fees regime back in July 2013.
The sudden and short term increase is expected as a result of the introduction on 1 July 2015 of new rules* that will severely limit the amount that can be claimed in actions for unlawful deductions from wages.
Currently, where a worker has not been paid any monies due under their contract of employment they can bring a claim in the Employment Tribunal for that sum. There is no limit on the amount that can be claimed, and given that the claim may relate to a series of deductions going back to the start of their employment substantial sums of money may be involved.
However, claims made on or after 1 July 2015 will be subject to a two year compensation limit regarding any series of deductions. The changes are a result of the landmark decision last November** that laws regarding the calculation of holiday pay had to take into consideration overtime payments that the worker had received.
If claims for shortfalls in holiday pay could be made going back over a number of years it would have had a devastating effect on many businesses. The judgment did suggest that if there had been a gap of over three months between missed payments then that would have broken the series. There have been concerns though as to whether that might be overturned in the future.
It means that subject to certain exceptions regarding statutory payments workers have now less than two weeks to lodge claims in respect of any series of deductions which goes back further than two years. This is likely to result in a brief rise in the number of claims being received in the Employment Tribunals going against the general trend of falling claim numbers following the introduction of fees almost two years ago.
Ironically the expected brief surge in claims will coincide with the hearing of the on-going union challenge regarding the lawfulness of the fees. Unison is arguing before the Court of Appeal that the fees prevent workers being able to enforce their employment equality rights and that this is another example of our laws being in conflict with EU law. However in two previous hearings the courts have not been persuaded that fees are preventing claims despite the huge 60 to 70 per cent drop in claim numbers. It was considered to be a matter of claimants preferring not to take the financial risk rather than being prevented.
It’s probably no coincidence that this is all happening just a week following the surprise announcement that the Government will now review the impact of the Employment Tribunal fees system. It is expected that the process will be complete at the end of the year though few expect that fees will be removed or substantially reduced.
* The Deduction from Wages (Limitation) Regulations 2014
** Bear Scotland Ltd & Others v Fulton & Others UKEATS/0047/13