Until today, employment tribunals have been free of charge to all users. But from now on, a worker who wants to issue a claim in the employment tribunal will have to pay a fee to do so.
For "Type A" claims (mostly the minor ones), the claimant will have to pay an issue fee of £160 and, unless the claim is settled beforehand, a hearing fee of £230.
For "Type B" claims, which cover everything else, including in particular unfair dismissal, discrimination and whistleblowing, the issue fee is £250 and the hearing fee is £950.
To put this in context, in 2011/12, the median award of compensation for unfair dismissal was £4,560. Although the employer will probably be ordered to reimburse the fees to the claimant if he or she wins, that's quite a big "if". A stake of £1,200 in respect of the total Type B fees payable is a lot to gamble on what in most cases will be at best a relatively modest return.
A lot else has changed since the right not to be unfairly dismissed was created in 1971 and the industrial tribunals were given the task of enforcing it. First and foremost, the volume and complexity of employment law has expanded exponentially. The primary drivers here have been the introduction over a period of more than forty years of laws to protect equality, coupled with EU requirements to legislate on matters such as working time and collective redundancy consultation.
This has in turn led to the increasing use of lawyers on both sides. As a result, the cost of resolving claims in the Employment Tribunals has inevitably rocketed. In one case last year (Vaughan v London Borough of Lewisham and Others, UKEAT/0533/12), the employers' costs amounted to £260,000 and the employee, who lost, was ordered to pay one-third - i.e. some £87,000.
And the Tribunal system itself is creaking at the seams, with the backlog of claims in 2011/12 standing at over 540,000. The average time taken to get a contested claim from start to finish is 76 weeks - unfair dismissal claims average 35 weeks, sex and race discrimination claims average 126 weeks.
Contrast all of that with the original vision of the Donovan Commission in 1968 of a system that would be "easily accessible, speedy, informal and expensive" . We appear to have gone a long way backwards since then.
Does it have to be like this? For major cases, for example sex discrimination causing a complete mental breakdown, or the wrecking of a whistle-blower's career, the answer might be yes. But for the vast majority of Tribunal claims, a key problem may well be the continuing adherence to the traditional English adversarial system. This requires that the judge plays a relatively neutral role, as a kind of umpire, whilst the parties hack expensive lumps out of each other.
An alternative would be for the Employment Judge to play a far more pro-active, inquisitorial role, entering into a dialogue with the parties and applying strict limits on time, length of documents, numbers of witnesses and so on. The CBI have said they would like to see this approach adopted. Perhaps it could be tried on a pilot basis for cases where the Claimant is prepared to limit his or her claim to, say, £20,000, in exchange for which no fees would be payable and no adverse costs order could be made, save in the most exceptional of circumstances. Given all of the problems with the current system, it may be worth a try.
Michael Bronstein is a partner in the employment team at Dentons
