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Employment tribunal fees: preventing vexatious claims or limiting access to justice?

Daniela Mailat student at Leeds Law School, Leeds Metropolitan University, is the winner of the DWF essay writing competition. Here is her winning entry.

For the first time since Employment Tribunals were created in the 1960s, workers in the UK are now charged a fee to bring a claim, a fee if the claim is heard and a further charge if they want to appeal against the decision. Under the rules, it will cost £160 or £250 to lodge a claim, with a further charge of either £230 or £950 if the case goes ahead. In the Employment Appeal Tribunal the fees are £400 to lodge an appeal and another £1200 for a full hearing.

One of the effects of the new system should be a rise in the value of settlement offers for low-value claims but offering £500 as an economic offer to settle is not likely to be attractive to a claimant who has paid £1,200 to bring a claim.

The number of tribunal claims rose by 81% between 2001 and 2011, with the administrative costs being borne by taxpayers up until now. There were 186,300 claims accepted by employment tribunals in the year to March 2012, according to the Ministry of Justice. Of those, 31% were for unfair dismissal, breach of contract and redundancy. Twenty-seven percent of the 186,300 claims were withdrawn or settled out of court – but employers in those cases still had to pay legal fees in preparing a defence

The purpose of introducing fees is primarily to help reduce frivolous claims and should also speed up the tribunal system, which will be welcomed by employers. Justice Minister Helen Grant said: “It is not fair on the taxpayer to foot the entire £74m bill for people to escalate workplace disputes to a tribunal”.

The CBI and the Federation of Small Business welcomes the fees arguing that the introduction of fees will curb the number of speculative claims and help reduce the perceived risk of taking on staffs.

On the other hand it will be interesting to see if there will be a drop in smaller money claims, now, as a result of the introduction of fees. Workers on minimum wage who suffer unlawful deductions may not be prepared to invest the best part of a week’s wages in a tribunal claim (they are unlikely to get a fee remission if they have a working partner). Introducing fees will affect the workers’ rights to claim unfair dismissal, discrimination and other injustices in the workplace. At the moment it appears to be that the fee system fails to comply with European, Human Rights or Equality Law.

Unite estimated that introducing fees would affect 150,000 workers per year and pledged to pay the employment tribunal costs of its members.

Unison general secretary Dave Prentis said: “The introduction of punitive fees for taking a claim to an employment tribunal would give the green light to unscrupulous employers to ride roughshod over already basic workers’ rights.” “We believe that these fees are unfair and should be dropped” .

Andy Prendergast of the GMB, said: “The imposition of such fees represents the latest in a number of attacks on employment rights by the government.”

So essentially employers can now act with complete impunity, as in reality those who have been treated unfairly in the work place will be unable to go to tribunal due to lack of finance. Fees are part of the Government’s program to promote early resolution of disputes in order to help individuals and companies to get on with their lives and businesses. The intention is to encourage people to look for alternatives – like mediation – so that tribunals remain a last resort for the most complex cases.

However the battle is not over yet as Unison has been granted permission by the High Court to seek a judicial review over the new fees and a hearing will be held in October.

 

 

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further