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Why the Government's introduction of employment tribunal fees has caused controversy

Recently published Employment Tribunal statistics have provoked a swathe of criticism over the Government's introduction of fees in respect of employment claims.

March 13 saw the announcement of the first full quarter of statistics since the new rules came into force on July 29 last year, meaning lodging claims can cost employees up to £1,200 depending on their nature.

The fees start at £160 to issue a claim rising to £250. Should the claim progress to a hearing there are potential fees of between £230 to £950 payable by claimants.

The figures revealed:

- a 79% decrease in claims compared with the same period (October to December) in 2012;

- 75% less claims received than in the previous quarter (July to September); and

- 63% less age; 58% less disability; 57% fewer race and 77% sex discrimination claims and 58% fewer unfair dismissal claims than in the same period in 2012.

Critics claim the figures are irrefutable evidence of the unfair impact the system has had on workers, barring access to justice in respect of employment rights.

Dave Prentis, General Secretary of UNISON, described the announcements as "shocking" and "deeply disturbing" evidence of a "barrier to justice". Unison recently lost its High Court challenge to the introduction of the fees but is thought to be considering an appeal in part based on the new statistics.

Usdaw General Secretary, John Hannett, reacted by condemning the Government's fees policy as "unjust".

Employers meanwhile may be comforted by what is stark evidence of the effect of the Government's policy on the likelihood of claims being brought against their business.

A criticism much voiced by employers in respect of the previous system was that it was disproportionately weighted in favour of employees. Employers complained of employees being able to bring claims with little or no risk to them, whilst the disadvantages for businesses in responding is considerable.

The intention of the new system was to discourage unmeritorious claims being pursued. Critics point to a disproportionate reduction in claims now being presented, suggesting that worthy claims are being discouraged by stiff costs.

A raft of additional reforms are also imminent, designed with the intention of reducing the workloads for Employment Tribunals. These include early conciliation of claims using ACAS prior to any claims being lodged and the introduction of additional penalties of up to £5000 against losing employers in "aggravated" cases. Those fees are payable to the Treasury as opposed to successful employees.

An unwelcome corollary of the extreme reduction in employment claims for employers has been increased uptake in Trade Union memberships. Some Unions undertake to pay the relevant fees for their members, should they have valid claims and heralded these new figures with calls for increased members. In the longer term therefore, this could create additional headaches for business for example in increased collective disputes and industrial action.

Whilst the High Court in UNISON's challenge indicated that the Government should review its policy voluntarily, should new figures merit this, that is considered unlikely and the fees will remain for the foreseeable future. It is anticipated the statistics will feature highly in Labour's challenge to the coalition's policies in the run up to the next general election.

John Lee is an associate and solicitor advocate at DWF

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Careers and Jobs

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