16th March 2018 ❘

What impact has the abolition of Employment Tribunal fees had on employers?

In July 2017, the UK Supreme Court declared that employment tribunal fees were unlawful and they were then abolished with immediate effect.

It was a decision that took many by surprise, given the lengthy legal battle which had preceded it.

The legal appeal against employment tribunal fees was brought by the trade union, Unison, which argued that the introduction of employment tribunal fees in 2013 prevented many employees from being able to bring claims in the employment tribunal, especially as making a claim could incur employment tribunal fees as high as £1,200.

Following the introduction of employment tribunal fees in 2013, the number of claims being brought in the employment tribunal dropped on average by 65%.

Has the volume of employment tribunal claims increased now that fees have been scrapped?

The Ministry of Justice has just published the provisional Tribunal statistics for October to December 2017 and these show that, with fees now abolished, the number of single employment tribunal claims (as opposed to class actions brought by multiple claimants) has increased by 90%.

Although this figure could be influenced by a wave of equal pay claims that have been lodged, information given out at recent Employment Tribunal User Group meetings indicates that the number of claims being received by the employment tribunal has doubled.

As with any statistics, the precise impact can be difficult to determine, but it is safe to say that since the removal of the fees there has undoubtedly been a substantial increase in the number of employment tribunal claims being brought.

What effect has removing tribunal fees had on the employment tribunal system?

As could be expected, this influx of claims has had a dramatic impact on the employment tribunal system.

The drop in the number of employment tribunal claims over the last four years meant that that system was stripped of many of its resources. As there were far fewer claims, many employment tribunal judges decided to move on or retire and a number of Tribunal offices were closed. The Government took the view that there was no need to spend money on resources when there were so few employment tribunal claims.

Now, however, the employment tribunals are facing a difficult phase, with the number of claims having increased dramatically, but with many of the resources needed to deal with them not being available. This means significant delays to the progress of employment tribunal claims and hearings being cancelled at the last minute, all resulting in extra cost in time and money for the parties involved.

What does this mean for employers?

Increase in employment tribunal claims…

Employers need to be aware that an employee who is dismissed (and who has the two years’ length of service generally needed to be able to claim unfair dismissal) or who feels they have been discriminated against is now more likely to bring a claim in the Employment Tribunal, as they are not required to pay out anything to do so.

This is particularly the case for low value claims, where up until the abolition of employment tribunal fees, the employee would be far less likely to bring a claim. Now they could think: “I may as well. What have I got to lose?”

No more “put up or go away”

When an employee was required to pay a fee to bring a employment tribunal claim, employers could usually test the waters before discussing settlement, by waiting to see if the employee would actually pay out the fee and start an employment tribunal claim. Now employment tribunal fees have been scrapped, the option of that tactic has been removed.

Increased trade union activity

The UK Supreme Court decision was a huge victory for Unison and was widely published. It may be that because of this, more employees now decide to join unions, which in turn could lead to unions seeking formal recognition from employers, where otherwise they wouldn’t have had enough members to do so. Also, employees who have union backing may be more inclined to bring employment tribunal claims.

What should employers do now? My top 3 tips.

Policies and practices

Employers should make sure that their policies and practices are up to date and legally compliant, particularly in relation to discipline and grievances and also in relation to equality and diversity.

Training

The fall in employment tribunal claims in the last four years means there is a collection of new managers and HR professionals who have possibly never had any experience or exposure to an employment tribunal claim. It’s important to provide training to these individuals to ensure they are fully aware of the increased risk of employment tribunal claims, know how to reduce those risks and know how to deal with employment tribunal claims if they arise. Training will also ensure that your policies and practices are implemented correctly.

Early Advice

It’s important to obtain early advice on employment problems, because by doing so, employers help to minimise the risk of a potential claim and increase their chances of succeeding at an employment tribunal if a claim is made.

For more information about employment tribunals, or for advice on helping avoid a tribunal claim, please contact Anna Lovett on 01228 552220 or by email at: alo@burnetts.co.uk.