According to figures produced for the Trade Unions Congress (TUC), which are based on the latest figures from the Ministry of Justice, there has been an overall reduction of 79% in the number of employment tribunal claims since fees were introduced in July last year. Issue fees for those wishing to submit claims range from £160 to £250 and hearing fees are £950. It has been claimed that women and low paid workers have been disproportionately affected by the changes. This is one of the arguments being pursued by UNISON in its legal challenge against the fee regime which is currently being heard in the Court of Appeal. The Government, meanwhile, states that the fee regime is necessary to ensure that the cost of the tribunal system is shared more equally between taxpayers and those who use the system.
The number of women pursuing sex discrimination claims fell from 6,017 in the first quarter of 2013 to 1,222 in the first quarter of 2014.
Claims for unpaid holiday pay and wages have also fallen dramatically by 85% overall. This is likely to be because it will often be uneconomic to pursue such claims in the tribunal now that fees are payable as it will often mean that the cost of pursuing a claim may be more expensive than the amount the individual is owed.
There is a tribunal fee remission system in place but this has been criticised by the TUC who state that only 24% of workers who applied for financial assistance received any form of fee remittance.
Whilst the overall number of claims has fallen, those claims that are pursued may be more expensive for businesses to deal with. An increase in the number of “kitchen sink” claims has been reported. If an employee is going to pay a fee they appear more likely to add in allegations of unlawful discrimination or whistleblowing in order to try to inflate the potential value of what usually amounts to nothing more than an unfair dismissal claim. This will make it more expensive for businesses to defend the claim initially when filing a response and requesting further particulars of claims. However, discrimination and whistleblowing claims which lack genuine merit are likely to be sifted out by the tribunal at the Preliminary Hearing stage of the proceedings but that will not be before the cost of dealing with the preliminary issues has been incurred by the business. Those costs are most unlikely to be recoverable from the employee.
Businesses are well advised to consider taking out insurance to protect their businesses against the costs of tribunal claims and to cover the costs of any awards and settlements. For further information or to obtain a quote please see https://www.premier-legal.co.uk/services/hr-and-insurance-service/