What does this mean in practice?
The regime has been ruled to be unlawful and the immediate consequence is that the current Tribunal fees are no longer payable in respect of new claims issued or those pending. In the short term employers can expect to see an increase in claims being brought by employees – given that there has been a reduction in claims of around 70% since the introduction of the fees; it is possible that the increase could be very substantial. The Supreme Court has also decided that fees paid by claimants since the introduction of the fee regime will need to be refunded.
Importantly, it is possible that claimants who have been deterred from bringing claims since the introduction of the fee regime will now seek to bring those claims, based on an argument that time limits which have expired should be extended on the basis that it would be just and equitable or that it was not reasonably practicable (depending on the type of claim) to bring a claim in time. If such claims were permitted to proceed, this would potentially lead to a very substantial increase in litigation, and employers having potential liabilities that have not been anticipated or accrued for.
The abolition of fees should be particularly borne in mind in connection with the following:
- Due diligence – there is a possibility that employees may now be able to bring claims which would otherwise be out of time on the basis that it would be equitable for them to be allowed to do so given that they were denied access to justice as a result of the introduction of Tribunal fees in 2013. Businesses will have to consider the potential value of employment law claims in view of this risk as claims which they may have thought were out of time, could arguably now be allowed to proceed. This may be particularly significant in the context of group litigation or union-backed litigation – eg. holiday pay/TUPE claims.
- TUPE – for the reasons stated above, businesses will need to consider the impact of the judgment when pricing for projects and when requesting and providing indemnities, with particular regard for time limits that apply to the latter.
- Generally – businesses with significant employee populations should expect to receive a greater number of Tribunal claims in the future. It is not clear if a new fees regime will be introduced (perhaps unlikely given the current political climate) but for now, claimants do not need to pay fees in respect of new claims or those pending.
How will Media Businesses be affected?
This year has seen an increase in M&A activity in the Media sector, with high profile deals such as Netflix Inc.’s recent acquisition of Millarworld, the comic book publisher behind a series iconic characters and stories such as Kick-Ass, Kingsman, and Old Man Logan. As Media businesses look to expand their organisations through strategic acquisitions, it would be prudent to closely scrutinise the due diligence information provided by targets to ensure that any future claims risks are properly identified. Careful consideration needs to be given to pricing too; and it is also worth revisiting the duration of indemnities. Given the current uncertainty around the time limits for bring claims, we expect to see a trend of businesses asking for longer periods of protection.
At the other end of the scale, many start-up Media businesses rely heavily on technology and employ very few employees. As they grow, devoting time and resources to employee relations issues may not be viewed as a priority. However, it is now more important than ever for such business to focus on employee engagement and ensure they communicate effectively with their workforce. Appropriate policies dealing with issues such as whistleblowing and dignity at work should also be introduced and adhered to. After all, employment tribunal claims can be distraction and a drain on resources; so against a backdrop of a regime where an increase in claims should be expected, any steps Media businesses can take to reduce the risk of future claims should be seriously considered.