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  • Lee Calver
  • 18 March 2014
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Employment Tribunal claims plummet since introduction of fees

It was last week revealed that Employment Tribunal claims dropped by 79% year-on-year in the last quarter of 2013 following the Government’s decision to introduce fees for employees bringing Tribunal cases.

According to the Ministry of Justice (MoJ), the number of claims totalled 9,801 between October and December 2013, meaning there were 79% fewer claims than in the same period in 2012 and 75% fewer than the quarter before.

The Government controversially introduced fees for bringing a claim to an Employment Tribunal in July 2013, stating that it would ease the burden of Tribunals on employers by forcing employees to spend £1,200 for claims of unfair dismissal or discrimination.

Commenting in wake of the MoJ findings, Justice Minister, Shailesh Vara, said:

“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 and arbitration.”

He added:

“It is not fair for the taxpayer to foot the entire £74m bill for people to escalate workplace disputes to a Tribunal. And it is not unreasonable to expect people who can afford to do so, to make a contribution.”

In November 2013, UNISON took legal action against the Government, calling the fees unlawful. Following the announcement from the MoJ last week, the union responded, with UNISON General Secretary, Dave Prentis, stating:

"The figures are shocking and the disastrous impact of Tribunal fees is now blatantly obvious. The introduction of fees was unfair and they should be dropped, which is what we hope to argue in the Court of Appeal."

UNISON, last month pledged to “fight on” in the face of the High Court ruling rejecting UNISON’s challenge to the Government’s decision to introduce Employment Tribunal and Employment Appeal Tribunal fees.

Clearly the introduction of fees for bringing a claim to an Employment Tribunal has had a huge impact on the latest figures, but there could also be other factors involved.

Tom Flanagan, Partner and National Head of Employment at law firm, Irwin Mitchell, commented:

"One key reason could be the increase to two years of the qualification period for unfair dismissal. There has also been the change to the compensation cap for unfair dismissal."

Flanagan also stated that these factors could lead to employers being less legally exposed than in previous years. 

Providing an expert view on the current situation and responding to Mr Flanagan’s comments, Workplace Law Head of HR, Suzanne McMinn, said:

“I would agree that this would have an impact on unfair dismissal cases, where increase in the qualification period is relevant; however, it would not have had such a negative impact on discrimination cases which require no qualifying service. This has to be down to the impact of the introduction of a fees system.”

Richard Fox, Chair of the Employment Lawyers' Association and Head of Employment Law at Kingsley Napley LLP, raised concern with the latest figures:

“These figures are concerning. It is now clear that many employees have been deterred from bringing Tribunal claims since fees were introduced last year.”

He also warned:

“If employees no longer feel able to defend their interests via Tribunal proceedings, they may look to do so in other ways – such as by turning to trade unions to fight their corner.”

In response to Mr Fox’s comments, Suzanne McMinn stated:

“Employees may well feel that trade unions are now their only opportunity to have their voice heard, but with the introduction in April 2014 of the early conciliation scheme via ACAS, this provides employees with another avenue.”

Despite the recent drop in claims, the Government has estimated that forthcoming changes to the right to request flexible working could bring up to 150 extra Tribunal cases every year, each costing employers an average of £5,900.

The Children and Families Act 2014 received Royal Assent on 13 March 2014 and from 30 June 2014, the right to request flexible working will be extended to all employees with 26 weeks’ continuous service. Employers will have a duty to consider all requests for flexible working in a “reasonable manner”.

Employers’ groups have admitted they are worried things could backfire, making it harder for those more in need of flexible working, increasing the risk of discrimination claims, and adding unnecessary red tape.

The Federation of Small Businesses (FSB) states that it fears this change in the law will send out the wrong message to workers.

FSB Chairman, John Allan, commented:

“While the new procedure is designed to be light-touch, inevitably it will entail additional administration that the smallest of businesses will have to learn and may struggle to apply.”

He added:

"Where requests are declined, our experience shows 'the right to request' can introduce an unwelcome negative dynamic into the workplace."

So what is the best way for employers to prepare for the upcoming changes then?

Workplace Law Head of HR, Suzanne McMinn, explained:

“Employers need to ensure that their policies and procedures are up to date and reflect the new legislative requirements. Managers need to be trained in how to deal with requests to ensure consistency, fairness and transparency. 

“Given the current decline regarding Tribunal figures, it is unlikely that this new piece of legislation will see any increase in Tribunal claims, more likely it has the potential to cause a rush of unhappy employees who haven’t had their flexible working request agreed to. What employers and employees have to remember is that it’s just the right to request flexible working arrangements – not the ‘right’ to have it!”

What are your views on the current situation? Have your say in our latest forum discussion group here.