Employment Law Update: The impact of abolishing tribunal fees
The implementation of tribunal fees under the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 brought about a significant reduction in the number of single and multiple claims being submitted. According to the Ministry of Justice the average number of total cases fell from around 5,000 a month to around 1,500 a month.
The arguments put forward by employers to support this change was that the tribunal system failed to discourage vexatious and weak claims. For the employee, the low costs involved in making a claim meant there was little to be lost in financial terms whereas many employers were left picking up the cost of defending unsuccessful claims.
The Supreme Court ruling in 2017 changed all that. In abolishing tribunal fees, it reversed that trend where the quarterly statistics published by the Ministry of Justice for the period April to June 2018 showed:
- an increase of 165% in the number of single employment tribunal claims lodged compared to the same period in 2017 (the last quarter when fees were in force)
- an increase of 344% in the number of multiple claims lodged compared to the same period in 2017.
Implications for Employers
These numbers are significant with a total of 10,966 single employment tribunal claims being received between April and June 2018. The Ministry of Justice argues that they are still hearing claims within 28 weeks however the experience of several key Employment Law firms are reporting that the impact has brought about significant delays in the processing and hearing of claims with timescales nearly doubling.
Our Advice
The importance of maintaining effective employee relations on a collective and individual level is obviously good for business but as these changes are starting to take effect the implications for employers being drawn into long and financially draining cases now gives this area of HRM further impetus.
Information correct as at December 14, 2018
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