Fees in the Employment Tribunal – a benefit for business?

by Redmans Solicitors on February 25, 2013

  • Sumo

In this post we’re going to examine the current proposals that the Government is seeking to implement regarding the introduction of fees to use the Employment Tribunal system. We’ll do so by examining the following elements:

  1. What are the current proposals and when are they expected to come into force?
  2. Are the current proposals beneficial for business?
  3. Weighing the pros and cons for employers and employees

What are the current proposals and when are they expected to come into force?

The current proposals were announced by the Government in October 2011 and clarified further in July 2012. The Government is – for the first time – seeking to introduce fees for persons to use the Employment Tribunal system. The fees will apply from the summer of 2013 and will vary, depending on the circumstances of the claim. In a typical single-Claimant case, the Claimant will pay a £250 fee on the issue of their claim and will then pay a £950 fee shortly before the hearing to pay for the cost of the hearing. This means that the general cost for the running of a claim from start to finish will be at least £1,200. The fees will be reimbursed to the Claimant if they are successful in their claim.

Are the current proposals beneficial for business?

This depends on how you view the question. There are a number of potential benefits to business: a potential drop in number of claims; consequent lower costs for employers; and the encouraging of the active settlement of claims number among them.

However, there are also potential drawbacks to the introduction of fees for the use of the system. Highly-paid employees won’t be deterred from making Employment Tribunal claims by the nominal cost; fees will graded so that unemployed and those on very low wages will be liable for fees (through a remission system); and the introduction of fees will only serve to make the Employment Tribunal system more complex and opaque for both employers and employees. This will increase the necessity to rely on specialist employment solicitors in undertaking claims, rather than the employee or the employer being able to run their claim themselves. Further, it is debatable whether the introduction of fees will cause a drop in the number of claims – for example, aggrieved employees will not be deterred from pursuing what they see as justice by the necessity to pay the relatively low sum of £250.

Weighing the pros and cons of fees for employers and employees

Overall, the introduction of fees has its merits but it has also faced stern criticism from unions and solicitors for the reasons specified above. The GMB union in particular has criticised the Government’s plans (particularly its increasing of the continuous service needed to make a claim for unfair dismissal) but, equally, the plans have been welcomed by the Central Business Institute. It will remain to be seen whether the fee system will be successful.

Chris Hadrill, an employment solicitor at Redmans, stated that “there are significant benefits to the introduction of such a system but also significant drawbacks. The Government should be careful to ensure that a balance is struck between the needs of both employees and employers”.

Redmans Solicitors offers employment law advice from employment solicitors and compromise agreement solicitors

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