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Changes to employment tribunals

Jean Sapeta explains how new fees for claimants could restore the financial balance in employment tribunals.

Any GP hit with an employment tribunal claim from a disgruntled current or former employee is likely to have been struck by the apparent lack of financial risk to the employee.

Once an employment tribunal claim hits the employer’s desk, it signals the start of an expensive process with very little realistic prospect of the employer recovering costs even if the claim is defeated.

An employee simply has to submit a claim within the relevant time limit on the right form. In contrast to the rest of the court system, there is no charge for an employee to launch a claim.

Changes from summer 2013

Changes to be implemented in the summer of 2013 are designed to alter the balance of risk. Fees will be levied on the issuing of a claim. An employee wishing to bring a straightforward, low value claim, such as for unlawful deductions from wages or failure to pay a redundancy payment, will have to pay an up front fee of £160 in order to issue a claim. If they wish the case to continue to a hearing, they will have to pay a further £230 – total £390.

The more common claims against employers are for unfair dismissal and discrimination and whistleblowing. For these claims the fees are higher - £250 to issue the claim; £950 to take it to a hearing – total £1200.

The government's originally said it's reason for introducing fees was to reduce the number of weak claims, therefore reducing the burdens on business, and promoting early settlement of disputes. Later comment also referred to the cost of running the tribunal system, which currently amounts to £84 million of public money. The fees will contribute to this cost.

Possible problems

It is not clear that the reforms will produce the desired effect. Government proposals confirm that individuals on low incomes may be exempt from paying the fees. Clearly, someone who has been dismissed is likely to be without any income. Further details about fee exemptions are awaited.

Employee representatives have also expressed concerns about depriving workers with valid claims of their access to justice. There has in any event been a steady decline in the number of claims issued over the last three years. Ministry of Justice annual statistics reveal the number of claims brought in the year ending 31 March 2012 fell by 15% compared to the previous year, when in turn they fell by almost 8% compared to the year before.

There has been further comment from government about permitting 'no fault' dismissals and further clarification of these proposals is awaited. In the meantime, the best defence against vexatious employees is to have good policies which are implemented early if the relationship starts to deteriorate.

  • Jean Sapeta is a partner at specialist solicitors Hempsons and head of employment, London. She is also on the Medeconomics Ask the Experts panel.

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