Employment tribunals – an update

With cost-cutting high on the Government agenda another set of measures to reduce taxpayer costs have been tabled in the latest consultation on employment tribunals - Charging Fees in Employment Tribunals and the Employment Appeal Tribunal.

Currently costing around £84 million a year the consultation aims to lower this amount by proposing that those who use the “system make a financial contribution”. Two options are laid out in the consultation:

• Option 1: an initial fee of between £150-£250 for a claimant to begin a claim, with an additional fee of between £250-£1250 if the claim goes to a hearing, with no limit to the maximum award; or
• Option 2: a single fee of between £200-£600 – but this would limit the maximum award to £30,000 – with the option of an additional fee of £1,750 for those who seek awards above this amount

There are a number of benefits listed in the press release issued by the Ministry of Justice on 14 December, including:

• Access to justice for those on low incomes or limited means will be protected by fee waivers
• Discourage unmeritorious claims
• Encourage early settlement of claims
• Small businesses will be encouraged to recruit new staff without the fear of unnecessary actions
• Incentivise complainants to choose conciliation or mediation
• Reduce taxpayers costs

On the other hand, an article in the Law Society Gazette has comments from Victoria Phillips, head of employment rights at national firm Thompsons, who is concerned that “fees at any level will make it more difficult to pursue a claim against an employer.”

With the number of employment tribunals increasing every year and money spent by both parties unnecessarily on applications that often do not reach a full hearing, how well will these proposals tackle the problems going forward and who else will be affected by the changes? Your comments are of course very welcome.