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Employers agree introducing employment tribunal fees will reduce litigation, Eversheds poll shows

Almost eight out of 10 employers believe introducing employment tribunal fees will help reduce tribunal litigation, according to a survey by law firm Eversheds.

The poll of 600 employers found 63% of respondents thought the proposal to impose a significantly higher tribunal fee for claims valued above £30,000 would be likely to deter some higher value claims, nearly two thirds (60%) supported the proposed fee structure for the Employment Appeal Tribunal and 77% thought that it would not deter them from appealing.

During 2011, the Government announced a number of initiatives as part of its wider review of employment law. In particular, it issued a 'call for evidence' seeking information and views before the end of this month on a possible shortening of the 90 day redundancy consultation period. In addition, it announced a controversial change, whereby those using employment tribunals must contribute to the costs of their claims, by introducing fees for those who can afford to pay.

Three quarters (75%) of respondents support a shortening of the 90 day redundancy consultation period.

Geoffrey Mead, partner at Eversheds said: "The results show strong support for a shortening of the 90 day redundancy consultation period and strong agreement that this will ultimately reduce employment tribunal litigation.

"Shortening the 90 day redundancy consultation period received overwhelming support in the survey, with three-quarters of the respondents in favour. When asked to give their reasons, a recurring theme is a concern that a 90 day minimum can stretch out unnecessarily the uncertainty for employees and inject excessive delay at a time when employers may need to act with urgency to sustain a business.

"In addition, some respondents expressed the view that the 90 day period denies the reality that there are times, such as business and site closures, where consultation can make little difference to the end result. Amongst the minority of respondents, opinions reflected a view that 90 days is both fair and necessary to allow employee representatives to produce counter proposals and for employees to come to terms with the situation and to find alternative employment whilst still being paid."

Whilst respondents favour a shortening of the 90 days, they were split on what should take its place, with 30 days the most popular.

Mead added: "If the Government decides to change the 90 days, it must act with caution. This is because the duty to collectively consult derives from EU law and, whilst it permits the Government to reduce the 90 day period to 30, 45 or 60 days, employers would remain under the legal obligation to begin consultation "in good time" to allow meaningful consultation to take place, regardless of any set timescale. Some respondents acknowledged this legal and practical reality with suggestions of reducing the 90 days minimum to allow straightforward consultations to be dealt more quickly while recognising it was just that, a minimum, and that some situations would require more time for consultation to take place."

The Government is introducing legislation to allow employment judges to hear unfair dismissal claims sitting alone. Just over half (51%) of the respondents appear to agree with this proposal, which is surprising given reported widespread resistance to this change.

Mead said: "The Government may therefore draw some comfort from the survey's findings, which indicate that a small majority of respondents agree with this proposal and do not expect this change to make their organisation more likely to appeal the result. This may be because although employers would prefer a panel of three tribunal members they are aware of the high costs involved."

In relation to introducing employment tribunal fees, together with other reforms to the system, the Government expects to reduce employment claims by encouraging parties to settle workplace disputes earlier and faster by other means. Our survey gave a strong endorsement to this policy aim with 79% of the respondents agreeing that fees will help to reduce tribunal litigation.

But when it comes to the details of fee charging, opinion amongst the respondents was evenly divided. In particular, of the two fee-charging options, neither received majority support.

Mead said: "The Government should be concerned by the survey's results indicating that the £30,000 threshold for the payment of higher fees could deter genuine discrimination, whistle-blowing and equal pay claims. Yet, this threshold was proposed by the Government with the stated aim of assisting employers by providing certainty as to the value of any claim. It is clear that more work is required if this threshold, and other details of fee-charging, are to get beyond the drawing board."