The normal thing is that the number of Employment Tribunal claims increases year on year as the litigious society in which we live seems to endlessly expand. But the number of Employment Tribunal claims have fallen by 79% over the last twelve months, so what is going on? Well this question is easy to answer – the introduction of Employment Tribunal fees.
When the Tribunal system in the UK was established Employment Tribunals were created as Industrial Tribunals by the Industrial Training Act 1964. These Tribunals are judicial bodies made up of independent panels comprising a lawyer chairperson plus two other members who have strong knowledge of employment, one with a background as an employer and the other with a trade union background. These bodies are empowered to make legally binding rulings in relation to employment law disputes. The name was changed to Employment Tribunals in 1998. These Tribunals were intended to be a cheap, speedy and informal method of resolving employment disputes. However, over time they have become far more formal with lawyers representing both Claimants and Respondents, so making the process far more costly to employers but free for employees making claims. Even when employees approached lawyers arrangements were made on the basis of ‘no win no fee’ and this created a bias in the system.
The law changed to remedy this imbalance last year and we have just seen the first impact with a significant fall in claims. Under the new system an employee who wishes to bring a claim against their employer must pay various fees along the way. Claims are split into two categories; ‘A’ which cover simple low value claims (e.g. unauthorised deductions from wages) and ‘B’ which cover everything else. Fees payable by claimants for type A claims are £390 (an issue fee of £160 and Hearing fee of £230) and type B claims are £1200 (an issue fee of £250 and Hearing fee of £950).
It is well known that many claimants, before the new fee arrangement, put in claims in the knowledge that they would be ‘paid-off’ to avoid the employer incurring the expense of preparing for and attending the Tribunal and it is likely that the new fees will have dissuaded that type of claimant from pursuing a claim. If that is the case, on an ongoing basis the playing field will have levelled.
Dr Hugh Billot, Deputy Chairman
HR GO Group of Recruitment Companies
HR GO Recruitment offers solutions to all your staffing needs, temporary and permanent, please call 0845 130 7000
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