Employees still stuck with tribunal fees

The public service union UNISON is challenging the Government over the introduction of fees for employees who wish to bring a case to an employment tribunal, but a decision on the challenge is a long way off
Unhappy employees must continue to pay a fee to bring an employment tribunal claim until the outcome of a challenge by public services union UNISON is known.
Fees were introduced in Employment Tribunals at the end of July this year as part of a raft of measures designed to simplify employment procedures and encourage business to take on new staff.
Under the new rules anyone wishing to make a claim to the Employment Tribunal must pay a combination of fees. One payment is due on submitting the claim, known as the issue fee, and another a few weeks before the hearing.
There are two categories of claim, with different fees payable. Type A claims are for smaller, simpler cases such as unlawful deduction from wages, statutory redundancy payment, or refusal to allow time off. More complex claims such as for discrimination, unfair dismissal or whistleblowing would be categorised as Type B.
For type A claims the issue fee is £160, with a hearing fee of £230; for type B claims, it’s £230 plus £950. However, where there are groups of two or more claimants, there are different fees.
It’s a big change for employees looking to make a claim through the Employment Tribunal system, as they previously were able to do so without a direct financial commitment. The fees were introduced to tackle weaker claims and encourage greater use of mediation after the number of tribunal claims rose by 81% between 2001 and 2011*. But despite a surge in June, before the introduction of fees, and a subsequent dip in August, the Ministry of Justice reports that the overall number of claims over the quarter has been at around the same level as previous years.
Following the introduction of the fees, UNISON secured a judicial review with their main objection being on the grounds that national courts must not make it virtually impossible, or excessively difficult, to exercise individual rights conferred by European Community law. They have also argued that it is discriminatory as women generally earn less and so may find it harder to afford the fees. It is likely to be well into 2014 before a decision is made, but HM Courts and Tribunals Service have said that all fees will be repaid, with interest, if the Judicial Review finds the fees to be unlawful.
Said Commercial law expert Brendan O’Brien of Breeze & Wyles Solicitors LLP : “The Government hopes that reforms such as this will stimulate investment and expansion, by cutting red tape and the risks involved in taking on new staff for business.
“The flip side for employees with legitimate cases is the worry about finding the cash to make the claim in the first instance, as it’s quite likely they will be out of work, or worried about work, when they are considering making a claim. So it’s a good idea for former employees to get some advice on the strength of their claim before they set out.”
* Official figures for cases submitted to employment tribunals
Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.

Benefits in Kind and the use of LLPs

A recent tax decision could spell trouble for limited liability partnerships.
In the case the First Tier Tribunal was asked to decide
(1) Whether the provision of motor cars leased and owned by the LLP and car fuel to its partners was taxable as a benefit in kind on the Directors of the main business (‘Company’) by reason of their employment as directors of the Company; and
(2) Whether the provision of motor cars leased and owned by the LLP and car fuel to the members of the LLP is chargeable as a benefit in kind by reason of their employment as directors of the Company and therefore is subject to Class 1A National Insurance Contributions.
HMRC had taken the view that the Directors of the Company had the use of their cars because of their employment as directors of the company, not because they were members of the LLP. It argued that the relationship between the LLP and the company were not ‘at arm’s length’ and that the provision of the cars within the LLP was not necessary to its business, indeed it was unclear what that business was. Both of these factors, the HMRC argued, supported its view that the arrangement was artificial and the provision of the cars and car fuel to the directors was subject to Class 1A National Insurance liabilities.
The First-tier Tribunal commented as follows:
(1) The provision of motor cars leased and owned by the LLP and of car fuel to its members is taxable as a benefit in kind on the Directors of the Company by reason of that person’s employment as a director of the Company;
(2) Such provision of motor cars leased and owned by the LLP and of car fuel to its members is chargeable as a benefit in kind and therefore is subject to Class 1A National Insurance Contributions.
Brendan O’Brien Corporate lawyer and Managing Director of Breeze & Wyles Solicitors LLP said: “If this case is not challenged or appealed then directors and owners of companies need to be extremely careful how they deal with ownership of cars and the locking away of benefit in kind. Failure to deal with these issues properly could have disastrous implications with the HMRC able to recover unexpected tax liability from directors personally.”

Countdown to Christmas comes with a warning for consumers

As online sales continue to surge and retailers rev up for Cyber Monday, Commercial legal expert Brendan O’Brien of Breeze & Wyles Solicitors LLP gives a reminder of what to watch out for, and what protection consumers have when buying those carefully chosen presents for family and friends.
As the retail sector revs up for the all-important Christmas selling season, online sales continue to grow. The first Monday in December has become known in the retail trade as Cyber Monday because of an annual spike in online sales, which is said to happen following the last pay cheque before Christmas.
For many, online shopping seems so much easier than stumping round the high street, but with the growing number of web-based retailers, many of whom cannot be identified offline, consumers need to take care to find out who they are dealing with and move quickly if there’s a problem - such as damaged goods or where things are not as advertised.
New regulations are in the pipeline, with a draft Consumer Rights Bill and the implementation of parts of the European Consumer Rights Directive, all intended to give consumers more protection, including extended cancellation periods for online orders and clearer time limits for complaints. Until next year when these are introduced, there are two main pieces of legislation that protect you when you’re buying those presents.
Firstly, there’s the Sale of Goods Act, which applies whether you’re buying on the high street or by mail order or online. This says that anything you buy must be as described, of satisfactory quality and fit for purpose. The purpose could be a specific purpose that you asked the retailer about and for which they confirmed it would be suitable. That’s particularly relevant these days when people are looking for technological compatibility – for example if you were to ask if a mini-speaker system will work with a particular model of smartphone and the retailer says yes.
If anything goes wrong with the purchase, any claim must be made against the retailer as your rights are against the retailer who sold it to you, not the original manufacturer. If the product is faulty, you can choose to reject it and get a refund, but currently the law says you must do this within “a reasonable time”. What is reasonable depends on the product and how obvious the fault is. Generally, it’s best to act quickly and aim to return things within the first four weeks. If it’s too late to reject and receive a refund, you still have a right for faulty goods to be replaced or repaired.
And if those Christmas tree lights are not just faulty, they also set fire to your tree, then you are likely to be looking for compensation for the damage. Make sure you collect and keep any evidence and try to avoid carrying out repairs or covering up damage until you’ve made your complaint and asked the retailer to deal with the claim.
But if you’re buying online or by mail order, you have added protection through the Consumer Protection (Distance Selling) Regulations which give you the right to cancel the order and get your money back if goods are not delivered on time, generally within 30 days if no other date was agreed, and you may be able to claim compensation for anything that arrives late, or not at all. You also have the right to a seven day cooling-off period after you’ve ordered in which to cancel the order.
And it’s worth remembering that if your order is lost in transit, or damaged during delivery, then it’s up to the trader to sort this out. The goods remain their responsibility, not the delivery company, until the time they are delivered to you, so it’s not up to you to prove goods were damaged during transit or on delivery – a growing problem where delivery drivers may leave packages unattended or out in the rain. And if you’re asked to sign anything saying you have inspected goods, just write ‘uninspected’ on the delivery note.
You are entitled to your money back if the goods don’t match up to the description you were given or you can ask for a discount or a replacement – and you shouldn’t have to pay for sending items back if they don't meet their description.
But distance selling regulations only apply where a trader routinely does business through distance selling, which is assessed by whether they have standard procedures and contracts for this. If it’s a Christmas ‘pop-up’ or a supplier who does not regularly sell in this way, then you will probably have to rely on just the Sale of Goods Act.
If you’re buying online from a company based outside the UK, the seller’s terms of business will probably say that the law of the seller’s country will apply. However if the seller is in the European Union, they cannot deprive you of the consumer rights given to you by UK law - even if their terms of supply say that some other law, for example French law, will apply. The bonus of this is that the consumer has the benefit of whichever law is more generous on any particular point. If the terms say nothing about applicable law, and the seller is based in the EU, then UK law will apply if the customer is resident in the UK.
It’s also worth remembering that where you pay for the goods with a credit or debit card, you may be able to make a claim against the credit or debit company instead of the trader.
And finally watch out for fakes. Most of us are probably well aware of the huge number of advertisements for counterfeit branded clothing, jewellery and perfumes that can be found online, but concern is also growing over fake food and drink that is being offered, which is likely to be produced without proper hygiene and food safety standards. More than 40 people in Poland and the Czech Republic died last year after consuming counterfeit vodka which contained methanol, which is highly poisonous.
If you’re unsure about an online site for any reason, make some simple checks, such as seeing if you can find customer reviews on other sites and always make sure you’re on a secure page before providing any credit card details.
Happy Christmas shopping!
Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.

Overtime decision fuels employer worries over holiday pay

Employers could be forced to pay out billions in backdated holiday pay claims following Employment Tribunal ruling
An Employment Tribunal has held that overtime pay must be included when calculating holiday pay under the EU Working Time Directive.
In Neal v Freightliner Ltd, the tribunal has held that both compulsory and voluntary overtime pay should be included when calculating holiday pay under the regulations. It follows on the heels of a 2011 ruling in Williams v British Airways where the European Court held that holiday pay should be calculated based on basic pay plus any other payments that were “intrinsically linked” to work, such as overtime.
Now there are worries that the principle could be applied on other variable pay elements such as commission or even bonuses, and the ruling could result in big back pay bills for the retail and hospitality industry and other sectors where overtime is a regular part of the package.
In the meantime, experts are suggesting that employers think about cutting the amount of overtime worked or by changing pay rates for overtime, so as to minimise any future pay-out they may have to make.
And if employers take action now to change the basis for holiday payments, they have the chance to stop the clock for backdated claims, as any claim must be made within three months of the last incorrect payment. If employees are told that this change is on a temporary basis, then if the ruling in the Neal case is overturned on appeal, employers can go back to the old calculation method.
Said commercial law expert Brendan O’Brien: “A particular concern is that employees can bring claims backdated to 1998, provided they are brought within three months of the most recent underpayment. Because of rulings like this, John Lewis recently took the decision to pay staff back payments amounting to £40 million having decided that they had been miscalculated for the past seven years. ”
He added: “There is some hope the Neal decision may be overturned on appeal, so employers can wait for that appeal judgement before coming to a decision on introducing any changes, but they need to be alert to the potential impact of this case.”
Web site content note:
This is not legal advice; it is intended to provide information of general interest about current legal issues.
Neal v Freightliner [2013] (ET 1315342/2012)

Williams v British Airways [2011] : http://www.bailii.org/eu/cases/EUECJ/2011/C15510.html
Working Time Regulations 1998 : http://www.legislation.gov.uk/uksi/1998/1833/contents/made