Reduction in employment claims since the introduction of tribunal fees
A study of 180 companies, conducted by global law firm Eversheds has revealed that since the introduction of employment tribunal fees in July 2013, more than 40% have experienced a reduction in claims, with the biggest apparent drop being in unfair dismissal claims.
Under the current system, claimants must pay an issue fee and a hearing fee. The hearing fee was believed by the Government to provide a second opportunity to settle cases pre-hearing. However the study results indicate that this has not been the case, with only 8% of respondents believing the requirement to pay a hearing fee encouraged settlement and a third (33%) believing the hearing fee has made no difference at all to settlement. Of the remainder, 5% said that the hearing fee acted as a deterrent to settlement.
Other key findings from the study reveal that:
• 44% of respondents believe the extension of the qualifying period for an employee to be able to bring an unfair dismissal claim from one to two years has led to a reduction in employment tribunal claims; and
• 41% of respondents feel that recent changes to Tribunal Rules have enabled them to address weak and vexatious claims.
Geoffrey Mead, partner at Eversheds commented: “Employers’ experience of reducing numbers of claims may explain employers’ apparent complacency regarding the introduction of employer penalties in April 2014. No proud employer will want to be on the receiving end of a new employment tribunal penalty, and yet 66% of employers admit to taking no practical steps, such as reviewing disciplinary and training needs, to prepare for this change.
“As regards mediation, 73% of respondents expressed the view that mediation was always or sometimes successful, and 40% confirmed that they had attempted mediation during the last year.
“Just less than a third of respondents saw the recently introduced £600 fee for judicial mediation, which is payable by the respondent, as a barrier to judicial mediation, though 68% of those questioned felt the fee would make them more likely to use private mediators such as ACAS.
“It is clear that the introduction of fees is beginning to have a real impact on the number of claims employers are dealing with. With UNISON’s judicial review challenge having failed, this trend looks set to continue, for the time being at least, though future challenge and change is possible, if not likely. Mediation, however, clearly still has a valuable role to play in the settlement of disputes.”