• Tribunal fees are finished – and here’s what happens next

  •  
  • 23 Aug 2017
  • Comments 1 comments

Should employers brace themselves for a tsunami of claims? And will the government reintroduce fees in a different form?

It is a matter of weeks since the Supreme Court sent shockwaves through the HR and legal communities by deeming tribunal fees unlawful. Now, attention is turning to what happens next.

The charges – which were introduced in July 2013 and could reach as much as £1,200 for a single claim – had been praised in some quarters for deterring meritless claims but slammed by others for blocking access to justice, particularly among some of the most vulnerable subsets of society.

The introduction of fees undoubtedly triggered a fall in claims. Sources cited during the case revealed that they had decreased by as much as 70 per cent since fees were brought in. Others say, anecdotally, that the drop has been even greater. Official figures record 83,031 applications to tribunals in 2015-16, compared to more than 190,000 in 2012-13.

But while, on one level, the system is simply reverting to the previous status quo, there are several unanswered questions. For example, will the level of claims return to around the 200,000 mark? Or could it rise even further, if the government decides that some claims relating to events since 2013 can be brought retrospectively? (A decision on this is awaited soon.)

“On the face of it, there’s no reason that things shouldn’t go back to 2013 levels because underlying employment laws haven’t changed significantly,” says Colin Leckey, partner in the employment team at Lewis Silkin.

However, Paul McFarlane, partner and employment law specialist at Weightmans, doubts that claim numbers will come roaring back immediately. “Tribunal fees were a massive shock for everyone and it’s going to take a little while to readjust to the new world,” he says, adding that the advent of the gig economy means the types of claims being brought may become broader.

Stuart McBride, partner at TLT, says: “It will be a wait-and-see approach to the question of whether we are looking at a return to the pre-2013 level of claims. Much will depend on whether having the fee regime in place for the past four years has led to a change in the claims culture previously seen.”

The wider economic climate, and the introduction of the Acas early conciliation regime, are other factors that may affect the number of claims. But whatever happens, there are fears being voiced that many employers have de-prioritised employee relations expertise or may have lowered the amount of legal training they provide since the fees have been abolished.

Organisations must think carefully about both their process and their wider culture, experts suggest. “This may sound trite and very basic but employers need to be good employers,” says McFarlane. “They need to follow their own procedures. They need to try and treat their staff well. If they are good employers and follow those basic principles, they will have fewer claims, full stop.”

McBride adds: “Prevention is always better than cure. It will be wise for employers to ensure they follow proper procedures when dealing with disciplinary and grievance matters and that all line managers are up to speed on internal policy in this area.”

Should an individual situation appear to be escalating, McBride recommends considering a settlement agreement before the employee leaves the company and, should a claim be filed, engaging in early conciliation as fully as possible.

Paul Quain, founding partner at GQ Employment Law, says employers should take extra care to follow procedures to the letter from now on. “People have to be prepared for the fact that where they might have thought something was low value – if it was worth a week or two’s pay – they might have thought: ‘Well, actually we’ll take the risk; we won’t follow the procedure we should follow or we won’t make the payment because the individual is unlikely to bring a claim,’” he says. “I think they will have to think twice, and in those circumstances they should do things by the book.”

Leckey also notes that there is the potential for more spurious claims of the kind that were often highlighted before 2013, which are hard to prevent. “Either you’re hit with one or you’re not and you have to manage that as and when it comes along,” he says.

The ruling means the government is now in the process of paying back fees to those who have shelled out over the last four years – a task trade union Unison, which brought the case to court, believes will cost more than £27m.

The good news for employers, Quain adds, is that, if they have been asked to pay a claimant’s fees during the last four years, they too may be able to claim them back. Quain recommends that affected employers either speak to the tribunal themselves or ask their lawyer or representative to do so.

But given the amount it added to state coffers, the government is unlikely to be thrilled with the idea of cost-free tribunals and there has been speculation that it could try to bring the fees back under a full act of parliament – which could not be challenged in the courts in the same way – once parliament returns from recess in September.

McFarlane says that, if the Conservatives still had an outright majority in the House of Commons, “they could have brought back legislation to introduce fees at a lower level”, but it now seems less likely. Both Labour and the Liberal Democrats pledged in their general election manifestos to scrap the fees, he notes.

He also points out that the government has “got bigger fish to fry in terms of Brexit”, potentially pushing the likelihood of fees being brought back down the agenda.

In a statement issued shortly after the judgment was released, justice minister Dominic Raab said: “The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case. We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid. We will also further consider the detail of the judgment.”

 

Learn how to prepare and deal with an employment tribunal claim on a two-day course from the CIPD: bit.ly/CIPDETcourse

Need more advice on tribunals? Visit the CIPD topic page: bit.ly/CIPDtribunals

Add Comment
Comment List
Comments (1)
  • Protective claims may well make a quick comeback but what happens regarding the number of claims coming before the ET could well rest around the role of mediation going forward. This was never funded properly and many parties chose not to engage fully in early mediation thinking that fees would put possible claimants off or only engaging after a full ET1 was submitted. I think ET's may be guided to punish non co-operation with early mediation as a means to prevent a build up of cases. Employers (and unions) would do well to invest in their mediation training and capacity - lawyers will ave little vested interest in filling these gaps for them.