If news that the government is eyeing the introduction of fees for employment tribunals gives you a sense of deja vu, it’s not surprising. Back in in 2013, charges of £390 were levied on simple disputes (e.g. unpaid holiday pay) with more complex cases (discrimination, etc) requiring £1,200 to get off the starting blocks. Consequent appeals would set an employee back £1,600.
Four years later, in a case brought by Unison, the Supreme Court determined these fees to be unlawful since they interfered with the right of access to justice. Paul Kelly, head of the employment team at Blacks Solicitors, says the fees were also found to be indirectly discriminatory to women and people with protected characteristics.
Read more: Rise in remote work tribunal cases “tip of the iceberg”
That said, the fees did reduce the number of cases that weighed down the system, reducing their number by nearly half. Kelly adds that their removal was followed by an increase in claims from around 18,000 to about 33,000 between 2016 and 2023.
Taking into consideration the Supreme Court ruling, the current consultation, which closes on 25 March – stakes fees at £55, regardless of the type of case, or whether it is brought by one or more people. The same cost is proposed to apply for subsequent appeals.
The government is, perhaps, hoping to strike a balance here of reducing cases but not falling foul of the previous accusations of limiting access. The fees should also encourage greater use of conciliation services, although an Acas spokesperson declined to comment, noting that it would be responding to the government’s consultation directly.
The TUC, Citizens Advice and Work Rights Centre were among the 48 organisations that jointly wrote to the government on 26 February, to “strongly oppose” its plans for introducing employment tribunal fees. The group lobbied for urgent reconsideration of the proposal.
“We believe this will deter many from lodging worthy claims and gives a green light to bad employers to exploit their workers,” the group argued. They added: “Employment rights are only real if they are enforced.
“Tribunal fees risk pricing many workers out of workplace justice. [We are concerned] about the impact on workers in the middle of a cost of living crisis.”
The statement continued: “Fees are also being levied at a time when rising inflation and subdued wages are putting pressure on family budgets. Access to justice must never be contingent on your ability to pay.”
Other signatories included representatives of Maternity Action, Migrant Voice and Disability Rights UK.
Read more: Employment tribunal fees may be re-introduced
Kate Palmer, employment services director for the HR consultancy Peninsula, says that the reintroduction of fees is likely to be looked upon favourably by employers, who may feel that charging a fee will reduce the number of spurious claims being brought, thereby leaving them with more time for running their businesses.
She adds, however: “It remains to be seen whether the proposed fee is at such a level that it will deter claims, because this was at the heart of the union claim that was brought last time.”
Palmer notes that even with the lower rate, some exemptions to the fees are being proposed. “We will have to wait to see whether it will have the same dramatic reduction in tribunal claims that we saw last time fees were introduced,” she says.
“We certainly see our fair share of claims where you could say that the claimant is just trying their luck,” comments Rena Christou, managing director of the employment law firm, Halborns. “Vexatious claims and those with no – or little – prospect of success can be an expensive headache and a drain on resources for any business.”
Christou believes that the additional hoop to jump through before proceedings can start means that claimants have to be serious about investing time, energy and cost before going ahead. However, she also warns against businesses and HR teams regarding these fees as a safety net.
“Just because fees might make someone think twice about bringing a claim, it doesn’t mean they won’t issue one,” she notes. “Compliance, consistency and fairness throughout people processes still needs to be the order of the day, to ensure people issues are dealt with early and effectively, reducing the circumstances in which a claim is a likely outcome.”
While acknowledging the benefits that the fees could have in clearing the backlog of cases and encouraging the use of Acas’ conciliation services, former HR professional turned consultant Nicola Greenbrook also suggests the fees could still be an obstacle, especially during the cost of living crisis. “This could make a difficult time even harder, and impact mental health,” she says. “Whatever the outcome, HR will need to adapt its approach to handling employment issues, possibly requiring a review of policies, practices and management training.”
"Vexatious claims and those with no – or little – prospect of success can be an expensive headache and a drain on resources"
Sophie Bryan, founder of the workplace culture business Ordinarily Different agrees, hinting that the move could be indicative of a wider shift in strategy regarding the handling of workplace disputes. “It might necessitate a more thorough assessment of the merits of each individual case before moving to the tribunal stage, with a greater focus on pre-emptive measures to mitigate conflicts,” she says. Bryan adds: “HR directors must strike a careful balance between managing costs and protecting employees’ rights.”
The proposed policy change, argues Bryan, means that HR professionals should look to their own company culture and create a situation where disputes can be addressed swiftly and equitably. “In the end, the ramifications of reintroducing tribunal fees will depend on the ways in which companies adapt their approach to dispute resolution,” she says. “Flexibility and empathy is the key to preventing future challenges that may arise as a result of this change.”
This point is reinforced by Philomena Gray, chief people officer at brand experience agency, Imagination. “Injustice and the right to obtain access to tribunals shouldn’t come with a cost, it should be free for everyone,” she says. “Businesses need a better process for weeding out vexation claims. This won’t be easy, but it’s important.”
Gray says that at Imagination, employees are encouraged to speak out confidentially if they have any concerns, no matter how minor. “By capturing concerns early and taking the appropriate actions, we hope to head off any need for anyone to go to a tribunal,” she says.
Gray adds that getting to the stage of going to a tribunal is disappointing for any company that sets its people at the heart of its business. “It’s crucial to create an environment where everyone feels heard and valued, and where issues can be resolved internally before they escalate to formal legal proceedings.”
Whether these fees actually make it to reality is still up in the air. The forthcoming General Election may yet scupper all of the government’s plans. And, as one lawyer suggested, the issue of fees may be too controversial to address before the election and not important enough to address following it.
This article was published in the March/April 2024 edition of HR magazine.
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