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Gloucestershire Business News

'Abolition of employment tribunal fees should be reconsidered'

The Institute of Directors has today responded with alarm to a Supreme Court ruling that Employment Tribunal fees should be abolished.

Fees were introduced by the coalition government in July 2013 in order to "disincentivise unreasonable behaviour, like pursuing weak or vexatious claims". Previously taking a case to an employment tribunal had been free.

The IoD supported the introduction of fees after large numbers of members reported that they were being forced to settle cases they had been confident of winning because of the large costs and time involved in fighting them.

A review into the impact of charging fees conducted earlier this year found that, although the introduction of fees had raised substantial revenue - between £8.5million and £9million a year - the fall in the number of claims had been significantly greater than was first estimated.

However, after yesterday's Supreme Court announcement, IoD spokesman Seamus Nevin, head of employment and skills policy, said: "Businesses across the country will be extremely alarmed by this judgement.

"Before fees, individuals faced no risk or barriers in bringing claims that were not merited.

"Even the weakest or most vexatious cases meant sizeable legal expense and wasted valuable management time for companies.

"The then Coalition Government recognised this very real problem and brought in the fees to redress that balance.

"We would urge the Government to look again at these requirements in the round, and to examine whether there are ways to prevent employers being subjected to unmerited claims while also ensuring rightful access to justice for legitimate cases.

"There may be ways of improving the fees system by lowering some of the charges or increasing remittances, as suggested last year by the House of Commons Justice Committee, but the prospect of a return to the days of no fees will be a frightening prospect for employers."

Cathy O'Donoghue, from HR Champions in Gloucester, said the abolition of fees will spell a return to the days when anyone could bring a case against their employer, knowing they had nothing to lose as it was free.

"Abolition of the fees means we're left without a truly workable system that is fair for all parties," she said.

"Prior to fees being introduced, anybody could (and would) bring a case knowing that it would cost an employer at least £1,500, and often much more, just to engage a barrister to respond to an ET1.

"Too often it was simpler, quicker and cheaper for the employer to make a settlement payment of a few thousand pounds to make the problem go away; even when the employer had every chance of winning the tribunal.

"Abolition of tribunal fees means we're very likely to see a return to these practices. Why wouldn't you put a claim in if you knew you had nothing to lose; or even just because you wanted to cause your ex-employer some hassle."

Cathy added the ruling would be good news for employment lawyers, who saw much of their work disappear after fees were introduced because of the costs involved.

"Many of them saw the bulk of their work practically fall off a cliff edge when fees were introduced as they were no longer defending cases for employers or bringing cases for employees.

"Plus, as the fees were deemed to be illegal, there's sure to be a backlog of cases that would have been brought if fees had not been in place.

"Tribunal fees may not be the perfect answer, but employers also have the right to protection from unscrupulous or disgruntled employees who are out for revenge or to make life difficult for an organisation that has otherwise provided them a job in good faith.

"Going forward our advice to employers would be always follow procedure. Prevention is better than cure so if you have issues with an employee and you're uncertain how to act, seek advice as soon as possible rather than making a guess.

"Cases that should go in the employer's favour can often backfire because a simple process hasn't been followed."

For help and support in all employment matters and to prevent a case ever getting close to a tribunal claim, call HR Champions on 01452 331331 or email info@hrchampions.co.uk.

Picture credit: pixabay

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