Employers split over the future of employment tribunal fees

A report by the Chartered Institute of Personnel and Development (CIPD) has revealed that employers are split over the future of employment tribunal fees and whether they need to be reduced or abolished. Since the introduction of the fees in July 2013, there has been a 70% drop in the number of claims. The issue has also come under political scrutiny, with several parties calling for a review.

70% drop in claims, with a particular fall in employment discrimination cases

As of 29 July 2013, employees who have a grievance with how they have been treated at work or with the way in which they were dismissed have been required to pay an issue fee when submitting a claim to the employment tribunal. If the matter goes unresolved and continues to a hearing, the employee – as a claimant – is required to pay an additional hearing fee.

There are two levels of fees, which reflect the expected complexity of cases. Currently, for a level 1 claim – such as a claim for unpaid wages, a redundancy payment or unpaid holiday pay – the issue fee stands at £160, with the fee for proceeding to a hearing set at £230. For a level 2 claim, which involves discrimination matters or unfair dismissal, the fee for issuing is £250, with a hearing fee of £950.

While fees were initially introduced to act as a deterrent to frivolous or vexatious claims, which can cost employers several thousands of pounds to conduct and take an average of 19 working days worth of work, a recent report from CIPD has revealed that the drop in claims has been significant. Between April and June 2014, there was a 70% drop in single claims compared to the same period in 2013 before the fees were introduced. A particular fall was noted in the number of discrimination claims brought.

In the CIPD’s “Conflict Management: A Shift in Direction?” report, 1,000 employers were interviewed about the impact of the fees, with the results showing no consensus as to the future of employment tribunal claims. 38% of employers said that the fee system should be left as it is, but a similar number – 36% – believed that the current system is too prohibitive, and accordingly, fees should be significantly reduced or even abolished. Over a quarter of survey respondents were undecided on what should be done.

Political calls for reform

On the release of the CIPD report, CIPD employment relations adviser Mike Emmott said the issue to be decided upon is whether someone with a valid case is being unfairly discouraged from making a claim as a result of the fees. With the unprecedented drop in the volume of claims, he said: “Fees may not make it impossible for claimants to pursue their case but they’ve certainly made it more difficult, which begs the question: are we putting too high a price on justice?”

Whilst commenting that it is unlikely that the fee structure will survive the General Election unscathed, he made it clear that it “will be important to get the balance right between having a fee structure that is simple to understand and one that is proportionate to the type of claim being made.”

Reviewing the results of the report, business secretary Vince Cable said “the fact that employers are so split over whether the introduction of tribunal fees has been a good or a bad thing further reinforces the need for a review, despite opposition in some quarters”.

Opposition parties have made similar calls for a review. The Liberal Democrats, who supported the introduction of fees, have expressed concern that the impact has exceeded the levels anticipated and accordingly, that a review is now necessary. The Lib-Dem’s employment minister Jo Swinson has publicly stated that there is a “clear, necessary and now increasingly urgent need for this review to take place”.

The Labour Party has recently published a workplace manifesto entitled “A Better Plan for Britain’s Workplaces”, in which it promises to “ensure proper access to justice in the workplace by abolishing the Government’s tribunal fee system”. However, this has since been somewhat mitigated, with the party saying a review process will be led by the TUC and CBI to “agree reforms”, which may therefore fall short a complete abolition of fees.

With the impact of the fees significant for both employers and employees, what may prove most decisive is Unison’s appeal against the fees regime. After having a second claim for judicial review rejected in December, Unison has been granted a right to appeal, with a hearing expected in June. The case may therefore override the intentions of any political party, with Unison’s general secretary Dave Prentis saying he is hopeful that “every worker who has been forced to pay these punitive fees may get their money back if Unison’s case is successful”.

Resolving workplace disputes: Expert advice for employers and businesses

IBB Solicitors can help you deal proactively with employment disputes before they result in an Employment Tribunal claim. However, when that proves impossible, we will provide sound commercial advice and representation throughout any claim brought against your business, so you understand the issues clearly, the merits of your position and options available for resolving the dispute.

We represent employers and businesses at Employment Tribunals and the Employment Appeal Tribunal (EAT), defending claims, including for:

• Unfair dismissal;
• Breach of contract;
• Discrimination based on sex, race, disability, sexual orientation, pregnancy and maternity, religion and belief and age;
• Breach of the requirement to collectively consult;
• Equal pay;
• Redundancy pay;
• Bonuses.

We are also experienced Employment Tribunal advocates at both interim and final Tribunal hearings. This allows us to manage the handling of cases from start to finish where that is best for our clients. This can result in cost savings and provide you with consistency throughout a case. However, where our clients prefer, or if the case requires it, we would work closely with a barrister, to represent you at any final hearing.

We have also acted for clients in employment disputes at the High Court, Court of Appeal and Supreme Court. To discuss an employment tribunal and dispute resolution please call our specialist employment lawyers on 01895 207892. Alternatively email your details to employment@ibblaw.co.uk