Last summer, the tribunal system was overhauled, and fees for bringing a claim against their employer was introduced. With individuals now having to spend £1,200 for claims of unfair dismissal or discrimination, this represents a real barrier to workers wanting to fight alleged unfair treatment at the hands of their employer.
Further, since April 2012, legislation has also allowed employers to sack or make redundant those with less than two years’ service, without justification or recourse, a change the Government claimed was needed to give companies the flexibility they need to grow.
When these changes were first proposed, the Government and unions collided; with Whitehall arguing that it is “unfair” for taxpayers to foot the bill for unfair dismissal claims.
Minister for the courts & legal aid Shailesh Vara stated it is in everyone’s interest to avoid drawn out disputes, which “emotionally damage workers and financially damage businesses”, encouraging “quicker, simpler and cheaper alternatives” like mediation and arbitration. He argued: "It is not unreasonable to expect people who can afford to make a contribution to do so. As for those who cannot afford to pay, fee waivers are available.”
Employers’ organisations have, of course, welcomed the changes. They believe the revised legislation will reduce frivolous claims, helping smaller companies have more confidence to take on staff, lowering risk and improving the process when employees have to be made redundant.
So how have these new figures affected employment tribunals?
New figures released show a 59% drop in the total number of claims – from 13,739 between January and March 2013 to 5,619 in the first three months of 2014 – showing that fees are indeed deterring many workers from taking their employers to court.
There was an 85% fall in the number of claims for unpaid wages, a 62% drop in unfair dismissal cases, and sexual discrimination cases were down from 6,017 to 1,222.
However, these figures shouldn’t encourage complacency among employers, as anecdotal evidence suggests that those employees who have committed to funding their cases are bringing increasingly complex claims. This could result in rising legal costs for companies.
Some law firms will work on a 'no win no fee' basis with employees, whereby they will pay the tribunal fee to ensure they can bring a claim against their former employer.
Also, a number of trade unions – such as UNISON and Unite – are now offering to cover their members’ legal fees should they make a claim, reducing the financial impact on workers.
Alongside this, UNISON has also launched a judicial review against the introduction of the fees. Although this initially failed, judges stated that the changes could be reversed if it is found that workers’ access to justice is being blocked, and these latest figures will do nothing to suggest that this is not the case.
So are fees for unfair dismissal claims here to stay? We can’t be certain, but one thing we do know is that employers can’t be complacent.
We are witnessing the result of a fundamental shift in workers’ rights, but with the backing of trade unions seeking to increase their membership numbers, employees still have options for accessing justice where they have a strong case to bring. Employers must still ensure they protect themselves and behave within the confines of their employment contracts if they are to avoid stressful and costly legal action, with all the resulting damage to their balance sheets and reputations.
Leanne Thomas is an employment law specialist at DJM Solicitors. Her area of expertise is corporate and commercial business issues.