Employment tribunal fees don't make a fairer system

For many people, a tribunal fee might seem unaffordable, however good the cause, writes our columnist Gill Taylor

Gill Taylor
Gill Taylor

The government has introduced a fee-paying system for employment tribunals. It believes that employers were over-burdened by frivolous or misguided claimants in whose favour the old system was skewed. But the fact that an employee loses at tribunal does not mean that they were wrong to bring the claim.

There were 218,000 employment tribunal cases in 2010/11, of which 46,300 were for unfair dismissal: only 25 per cent of the unfair dismissal cases actually went to tribunal (the rest being dismissed at an earlier stage); and 8 per cent of the claimants won, with an average award of £9,133. This does not suggest a system weighted in favour of employees.

There are two tiers of cases. Type A is simpler cases, such as unpaid wages or redundancy, and it now costs £410 to get to a hearing. Type B is unfair dismissal cases, such as equal pay or discrimination, which costs £1,180. Appealing against a decision costs £1,600 and a fee exemption is available only if you earn less than £13,000 or are on major benefits.

Here is a hypothetical case of an employee who uncovers wrongdoing in a care home: she complains internally but gets nowhere, so she becomes a whistleblower and is sacked unfairly. She has too many savings to access the benefits system and has to pay her own fees. Her savings are leached away by fees and her legal bill. Whistleblowing was stressful enough before, but the costs will deter even more people from doing it.

The government's stated aim here is to transfer some of the £74m cost of running the employment tribunal system from the taxpayer to claimants. It believes that users who can afford to pay should do so because the taxpayer pays for free Acas conciliation. It expects to raise about £10m in fees and estimates that there will be a 25 per cent reduction in claims.

Some sector employers might have been worried by employment tribunal claims even though they had done nothing wrong. There were already three options: first, settling potential claims with a compromise agreement; second, asking for a pre-hearing review that deals with cases that have no chance of success; and, third, going to tribunal, where they usually won if they had done nothing wrong.

What about the other side of the coin - the employer who sacks people unfairly and hopes they are too cowed by the employment tribunal system to make a claim? For many people, a tribunal fee might seem unaffordable, however good the case.

The union Unison has applied for judicial review of the fees and a firm of solicitors has launched a judicial review in Scotland, both to be heard in October. The government has undertaken to refund all fees paid if the review is successful.

This is not a fairer system. There was no need to deter people and the fees are out of all proportion. Unscrupulous employers will be breaking out the champagne.

Gill Taylor is a sector HR consultant

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in
Follow us on:

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert Hub

Insurance advice from Markel

Charity property: could you be entitled to a huge VAT saving?

Charity property: could you be entitled to a huge VAT saving?

Partner Content: Presented By Markel

When a property is being constructed, VAT is charged at the standard rate. But if you're a charity, health body, educational institution, housing association or finance house, the work may well fall into a category that justifies zero-rating - and you could make a massive saving

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now