Employment tribunals have grabbed the headlines in recent months with high-profile cases of Uber and Deliveroo spilling over into the mainstream media as their employees have sought to define their rights in the new terrain of the ‘gig economy’.
Since employment tribunal fees were abolished in July 2017, there has been a 90% increase in claims. The period October – December 2017 saw the number of single claims leap to 8,173 – up from 4,200 in the same period last year. Claims are now at their highest level since 2013 when fees were originally introduced.
To Fee, or Not to Fee
You might wonder why the government introduced and abolished fees in seemingly such a short period. At the time of their introduction, five years ago, the reasons were threefold.
- Fees were intended to discourage employees from making frivolous or vexatious claims. There were no cost consequences to claimants at the time so the move was to reduce abuse of the system.
- There was a focus on fostering dialogue in the hope a resolution could be reached before both sides became entrenched. It was intended that fees would act as a deterrent to claims and an incentive to discussion.
- Tribunals were effectively free at the point of entry for claimants, a cost picked up by the state and funded from the government purse. The introduction of fees transferred the burden of court costs from the taxpayer to those bringing the claims.
So, why the swift U-turn? UNISON took the government to the Supreme Court in 2017. The court ruled that the government was acting unlawfully and unconstitutionally. Fees were scrapped, and the government were ordered to refund fees already paid.
Concerns had also been raised about the damaging effect fees were having on access to justice. Employees who wanted to pursue genuine cases were being discouraged particularly in low value claims – for example on issues like unpaid wages or holiday entitlement. Employees were balancing the cost of tribunal fees (up to £1200) against the relatively small financial reward for a successful case.
Dialogue Defuses Disputes
One of the key reasons fees were introduced was to head off disputes by encouraging dialogue between both parties. These recent statistics demonstrate that workers are again more willing to bring claims to resolve their employment disputes now they don’t have to find up to £1,200. All of this serves to underline for employers the importance of observing best practice when it comes to employee rights. While robust HR procedures are always essential, these figures are a stark reminder to organisations to review and, if necessary, strengthen processes to resolve disputes before the tribunal stage is reached.
When fees were introduced, some employers may have taken a relaxed approach in the knowledge that the financial barriers to bringing a claim acted as a deterrent to claimants. Employee attitudes have clearly now changed, and in an environment of no fees, we are likely to see increasing numbers of workers willing to bring claims.
At Progeny Corporate Law, we seek to make sure the organisations we partner with have all the support they need to encourage dialogue and resolve disputes before an issue needs to go to an employment tribunal. Receiving regular, expert advice can give employers confidence in their employment law and HR decisions, while reassuring employees that the structure exists within the organisation to accommodate their issues. However, we can also provide representation at court or tribunals if, despite best efforts, the situation reaches this stage.
Launching soon, our new Club Legal service will give businesses unrestricted access to expert support and guidance to inform all their management decisions while also making sure they have a robust legal structure in place to protect them and their employees, at a fixed price.
If nothing else, the news of such a dramatic increase in claims shows that a firm foundation of HR and employment policy is vital, whatever the prevailing attitude towards tribunal fees.
If you would like support with your employment law and HR requirements, please get in touch, we’d be happy to help.
The content of this article is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Progeny Corporate Law Ltd accepts no responsibility for the content of any third-party website to which this article refers.