Until now it’s been relatively easy – and free – for an employee to initiate a claim against their employer. There’s been little demand for them – or their lawyers – to consider whether their claim has any strength or prospect of success.
It’s estimated that employment tribunals cost the taxpayer over £80m per annum. Later this year, a fee system will be introduced to deter ‘vexatious claims’ by employees, or, as the Government puts it, to deal “robustly with cases with little or no prospects of success”.
The new fee system will have two tiers (depending on the complexity of the claim) and work as follows: any claimant (i.e. the employee) will have to pay an initial issue fee of between £160 and £250 to submit their claim, and then a further fee of either £230 or £950 should the case go to a hearing. (Dismissal, discrimination, and equal pay claims will be liable to the higher tier fees of £250 and £950 making the maximum total fee up to £1,200.)
Undoubtedly this is good news for businesses as employees will have to think twice before bringing about any claim. Not surprisingly this change in the law has its critics particularly as the tribunal system (or, to give its proper name, the Employment Appeal Tribunal – aka EAT) was created in 1975 to provide every worker with free access to justice.
The Coalition Government’s justification for the introduction of fees is to reduce the burden on the taxpayer. The Justice Minister Jonathan Djanogly said: “It’s not fair on the taxpayer to foot the entire £84m bill for people to escalate workplace disputes to a tribunal. We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives.
“It is in everyone’s interest to avoid drawn-out disputes which emotionally damage workers and financially damage businesses. That’s why we are encouraging quicker, simpler and cheaper alternatives like mediation.”
Nevertheless, we may see the cost of settling claims actually rise in practice as employees are likely to demand that the cost of the Tribunal fee they have paid for is added to any settlement payment. Furthermore, the introduction of fees may have the effect of hardening some employees’ views on litigation, causing them to feel that, having paid for their ‘day in court’ they would rather take their chances with the legal process than turn down reasonable settlement offers.
For further information see:
Update-29/5/2013: HM Courts & Tribunal Service announced that the date for the implementation of fees into Employment Tribunals (ET) and Employment Appeal Tribunal (EAT) will be Monday 29th July 2013.