Blog: Counting the cost of making a claim
"Last month, HMRC published a list of the most bizarre excuses employers had given as a reason for underpaying minimum wage to their workers.
The list includes an employer arguing that staff born outside the UK did not qualify for receiving minimum statutory pay, while another argued that an employee “only makes tea and sweeps floors”, suggesting that her duties made her ineligible for the minimum wage."
Dealing with unscrupulous employers to enforce your rights may be expensive. Picture: Ian Georgeson
While reading some of the excuses may be an amusing exercise, having to deal with unscrupulous employers in order to enforce your rights may be time-consuming, intimidating and, in some cases, expensive.
Across our network of Edinburgh-based bureaux, employment issues are a common area we offer advice and support on. The number of people we see with this sort of problem has been steadily increasing since 2010, and includes people who have issues in receiving statutory pay and entitlements from their employers.
Since the introduction of Employment Tribunal fees in 2013, the number of workers that have gone down the tribunal route has gone down by nearly 70 per cent. The cost to make a claim for unpaid wages or redundancy pay is £160, to which another £230 must be added if the case reaches the hearing stage. The costs are much higher (up to £1,200) if the claim concerns an unfair dismissal or a discrimination case.
One person who recently came to us for advice, Michael*, was retired but decided to take up a cleaning job for a bit of extra cash. He soon found out that he was not getting paid for the number of hours he worked. He stopped working after this and sought our advice on recovering unpaid wages.
Our volunteer advisor was able to draft a letter outlining how much the company owed him, and suggested he try the free ACAS early conciliation service if the letter did not resolve the issue. Michael decided that value of the owed wages made the matter not worth pursuing through the employment tribunal, and so his statutory rights could not be enforced. Unscrupulous employers often count on this unfair reality. Although some people on low income are exempt from payment of fees, the earning threshold below which workers are eligible for full fee remission is only £1,085 gross earning per month. This takes out of the scheme even people working on the national living wage (£7.20ph) for 35 hours a week. On top of this, the earning threshold does not rise every year with inflation, so that effectively fewer people qualify for fee remission each year.
The problem of cost is not the only issue surrounding employment tribunals. The procedures of ACAS conciliation after a claim has been lodged and employment tribunals are different. Often, people may be confused by their complexity and, if they deal with their employers on their own, may end up not getting the fair compensation they deserve.
John*, one of our clients, had nearly reached an agreement with his former employer through ACAS conciliation stage, regarding his claim; convinced that the matter was nearly settled, he did not pay attention to the separate tribunal papers asking for information and payment. John ended up missing the deadline, his tribunal claim and the employer withdrew the offer they had previously made. John spoke to our specialist employment adviser who was able to send a last-minute appeal to the tribunal, which was accepted. The claim was reinstated and progressed to the tribunal hearing. As these case studies illustrate, advice services like Citizens Advice Edinburgh play a key role in the healthy functioning of our society, providing advice and support to some of the most vulnerable in our communities. The future of essential advice service like this is under threat now more than perhaps ever; services which ensure rights are upheld, and that communities are empowered with the information and skills they need.
* service user names have been altered to respect confidentiality of those who make use of our services
Emanuele de Vito
Social Policy Assistant