Will Government proposals for employment tribunal charges reduce the number of claims?

Recent reports suggest that the Government plans to introduce charges for employment tribunals, in order to protect businesses by reducing the number of spurious or repeat claims by employees.

The plans, reportedly part of a report by “enterprise czar” Lord Young, go hand-in-hand with other rumoured proposals such as only allowing unfair dismissal claims to be brought by staff who have worked for their employers for more than two years.

These reports have not yet been confirmed. A Government spokesman stated that Lord Young will be consulting with businesses and employee groups as part of an ongoing review on a wide range of employment laws and that no decisions have been taken at this stage.

However, these rumoured proposals have been met with scepticism by HR bodies and unions, who question the fairness of such plans and whether or not they would successfully achieve the aim of reducing the number of tribunals. There is also mounting concern over how tribunal fees would be implemented and how much claimants would have to pay, if the charges were introduced.

Mike Emmott, employee relations adviser at the CIPD, said: “At the modest level the fee would have to be set so as not to be politically inflammatory and subject to challenge in European courts, I question whether it would act to discourage the considerable number of claimants who are, in any case, prepared to pay a significant amount of money for legal advice.

“Our view is there should be more use of mediation, preferably in-house, and greater efforts by Acas to steer people away from the tribunal process and keep it as a last resort.”

In 2001 a similar idea was put forward by the Labour Government to charge workers up to £100 for taking cases to employment tribunals. This was met with criticism from unions and back-bench Labour MPs, who claimed the measures would discriminate against low-paid workers, and the plans were eventually shelved.

Unions are once again voicing concerns about the implications that employment tribunal fees would have for those on low salaries.

Brendan Barber, general secretary of the TUC, commented: “Low-income and vulnerable workers are more likely to face discrimination and already find it hard to challenge unfair treatment in the courts. Introducing fees would make it even harder to seek justice and would be a victory for bad employers that seek to exploit workers who they know cannot afford to fight back.”

New Zealand’s Employment Court fees:

  • Statement of a claim: $200-300 (£100-150), depending on type of claim.
  • Application for special leave to remove proceedings to Employment Court: $200 (£100).
  • Application for rehearing: $300 (£150).
  • Filing challenge to objection to disclosure: $100 (£50).
  • Application for verfication order: $100 (£50).
  • Hearing fee, for each half-day or part thereof after the first day: $245 (£122).

In New Zealand there is already a charge of between $200 and $300 (approximately between £100 and £150 at the current exchange rate) for submitting claims to the Employment Court, depending on the type of claim. This is just one of a number of measures under the country’s Employment Court Regulations 2000, which aim to equal out the balance of fairness between employer and employee.

A recent article by the New York times labelled New Zealand as the third easiest in the world in which to start and run a company, showing, perhaps, that measures like these have had a postive impact for employers.

However, charges for tribunal claims have long been the norm in New Zealand and unions have bigger concerns over the country’s employment laws. Thousands of workers took part in rallies organised by New Zealand’s Engineering, Printing & Manufacturing Union this year over a new law which allows employers to “fire at will” a member of staff in the first 90 days of employment if the workplace has less than 20 employees.

In the UK, which is only one place behind New Zealand on the list of the easiest countries in which to set up a business, the Government is reviewing employment laws with the intention of maximising the flexibility for employers and employees and removing the “institutional bias” on small businesses.

Martin Warren, head of employment at law firm Eversheds, said that with tribunal claims up 56% this year, it is understandable that the Government would explore a tightening up of the tribunal system.

“We tried compulsory discipline and grievance procedures a few years ago, with a view to deterring claims prior to reaching tribunal, but this proved cumbersome for everyone concerned and did nothing to reduce the number of claims,” Warren commented.

He added that cutting the number of claims that get to tribunal has long been the aim of successive Governments due to the considerable costs and administrative burden for employers, along with the stretched tribunal system.

As yet, there is no indication that a fee for workers taking a case to employment tribunals will be introduced, but if it is, the current views of unions and the CIPD indicate that it is likely to be hit with a similar level of opposition as when Labour attempted to implement charges nine years ago.

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