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Review of the UK Employment Tribunal System

The Ministry of Justice and the Department of Business, Energy, Innovation and Skills are in the process of reforming the Employment Tribunal system as part of modernisation work. They have indicated that there are no plans to consider radical structural change so, presumably, it is not looking at converging the employment tribunal and EAT and the courts at this point, as has previously been mooted.

It is therefore expected that there might be reform by other means, including looking at awkward areas of shared and exclusive jurisdiction in employment and discrimination law and potentially changing some of the arbitrary limits which presently limit employment tribunal jurisdiction.

Let us hope any changes being considered reduce the incidence of claims failing because unrepresented litigants inadvertently bring them in the wrong venue, whilst increasing the likelihood of cases being dealt with by those judges best equipped to handle them.

Breach of contract claims

Currently, for example, an employee can bring a breach of contract claim in the employment tribunal but, only once where it arose or was outstanding when the employment terminated, up to a maximum value of £25,000 and assuming it does not include any “excluded claims” e.g. claims for breach of confidentiality provisions, post termination restrictive covenants or relating to an employer’s obligation to provide living accommodation.

Otherwise employment related breach of contract claims, including all contractual claims brought by current employees (who might still be working on under protect) have to be brought in the county court.

An employer, on the other hand can only bring a breach of contract claim against its employee in the employment tribunal as a counterclaim where the employee has brought a breach of contract claim first. In the courts the employer has the option of bringing a contractual claim first.

An employee might, whilst still employed, want to bring both a discrimination claim (which like an unfair dismissal claim can only be brought in the employment tribunal) and a breach of contract claim for more than £25,000. They might well have to bring 2 separate claims, one in the tribunal and one in the court, so doubling their likely legal spend. Further the findings in one claim could potentially bind the judge in the other.

Harassment claims

Harassment claims brought under the Protection From Harassment Act have to be brought in the courts, but in those harassment claims where the same facts were alternatively pleaded as a harassment claim under the Equality Act (i.e . where the harassment occurs because of a protected characteristic) then the employment tribunal would have exclusive jurisdiction)

Currently, therefore, a decision has to be made before starting a claim about where to bring it, as the harassment under these two acts cannot be pleaded in the alternative, within one set of legal proceedings.

Where there is a choice of claim venue to be had, issues to note include that:

  • In the employment tribunal each side typically bears their own costs irrespective of the outcome, whereas in the courts, the victor’s costs are potentially recoverable from the loser (though the extent of recoverability varies with the value of the claim). A claimant with a strong claim might therefore be swayed towards the courts by the prospect of recovering their legal costs on top of any award, whereas those with weaker claims might favour the costs regime in the employment tribunal, rather than having to pay the other party’s costs.
  • Presently ACAC early Conciliation is available for most employment tribunal claims but not for county court claims.
  • Time limits at for bringing claims differ. Most employment claims have to be brought within 3 months. A breach of contract claim in the tribunal would need to be commenced within 3 months of the termination of employment, but if that deadline is missed the same claim can be brought within 6 years of the breach in the courts.
  • Court fees are payable in the courts but have recently been ruled unlawful in the employment tribunal.
  • The availability of interest in contractual claims differ.

Employment status

Another issue that sometimes arises stems from the uncertainty which often exists around employment status when this is often determinative of where an individual’s claims must be brought i.e. in the courts or in the employment tribunal.

For example:- A claimant who is an employee can bring an unlawful deduction from wages claim in the employment tribunal, one who is a worker or someone who is genuinely self-employed would have to bring the claim in the courts. Likewise someone who is genuinely self-employed might be obliged to bring a discrimination claim (where possible) as a discrimination in the supply of goods and services claim in the courts, whereas as a worker or an employee must bring a discrimination claim in the employment tribunal.

A claimant assessing their employment status incorrectly could find themselves bringing their claims in the wrong jurisdiction, where their claim would fail and facing abuse of process arguments if attempting to re-file in the alternate venue.

The gig economy, a labour market characterised by the prevalence of short term contracts or freelance work as opposed to permanent jobs, has seen a proliferation of cases being appealed to the higher courts on the issue of employment status (see the Uber driver and Pimlico Plumber cases).

It is not unusual for a ‘worker’s’ true employment status to be other than suggested in the contract under which they are engaged.

Ensuring cases are dealt with by the judges best equipped to handle them

Arguably employment tribunal judges might have greater familiarity with discrimination issues and the relevant case law such that they might be better placed to hear all discrimination claims (those relating to employment or the provision of goods and services) and breach of contractual equality clause based equal pay cases.

Whilst a similar argument might be made for their being able to hear any work related harassment claims, such a change is perhaps less likely since it might result in a massive proliferation of employment related Protection From Harassment Act claims not envisaged by the legislators when the Protection from Harassment Act not envisaged when this legislation was passed.