Background
Prior to the 29th July 2013, bringing an Employment Tribunal claim, or making an appeal to the Employment Appeal Tribunal, incurred no cost to claimants. According to the Ministry of Justice, in 2010-11, this practice incurred a cost of over £84 million to the taxpayer. In 2012 the Justice Minister, Jonathan Djanogly stated that "it's not fair on the taxpayer to foot the entire £84m bill for people to escalate workplace disputes to a tribunal". The Government aimed to reduce taxpayer subsidy by transferring some of the costs to those who use the service, whilst protecting access to justice for all. The Government also introduced mandatory early conciliation on 6th April 2014, aiming to avoid Tribunal claims. This was part of the Government's plan to promote early resolution of disputes in order to help individuals and companies to get on with their lives and businesses.
What it means for you
This change was heralded by George Osborne as ending "the one way bet against small businesses", by making it much less risky for businesses to hire people. The Government hoped that by reducing the risk of tribunals for unfair dismissals, bosses will feel more confident about hiring people. Employees who want to bring a claim may regard this cost as a significant disincentive to litigating a dispute. Going by recent figures this seems to ring true. Overall, there was a decrease of 52% in claims received in 2014/15 compared to 2013/14. This is in line with the gradual decline of claims over the last five years. Many employers have long argued that the tribunal system does not discourage vexatious and weak claims. With this new system, employers are finding alternative ways to prevent cases going to a tribunal. Many employers are training managers to handle "difficult conversations" and encouraging the use of ACAS, which provides a free service to help workers and businesses settle disputes without going to a tribunal.
Challenges
UNISON have made two applications for a judicial review of the Tribunal fees, with the last application being dismissed by the High Court on 17th December 2014. The UNISON appeal against these decisions was dismissed on 26th August 2015.Mr Justice Underhill dismissed this on the basis that there is not a direct correlation between the overall decline in claims and affordability. However he did state that "the decline in the number of claims in the Tribunals following the introduction of the Fees Order is sufficiently startling to merit a very full and careful analysis of its causes; and if there are good grounds for concluding that part of it is accounted for by Claimants being realistically unable to afford to bring proceedings the level of fees and/or the remission criteria will need to be revisited". The 'full and careful analysis' may be through a Government post-implementation review. When the fees were introduced, it was understood that this would be carried out. However, at the time of writing, there has been very little information on when this will commence.
Conclusion
Two years on from the introduction of Employment Tribunal Fees, it is clear that the number of claims has significantly dropped. It is open to debate whether this is because employees have been put off by the cost; or because employers are turning towards mediation to settle disputes. Either way, with the impending post-implementation review, this issue will continue to be of great importance to both employers and employees.
If you would like to discuss any of the points outlined above, we have a dedicated team of expert employment solicitors who can provide you with all the necessary information, support and legal advice. Contact our Norwich branch today on 01603 693500 or our Sheringham branch on 01263 823398.
