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Are fees deterring employees from bringing employment claims?

Recent statistics show a marked decline in the numbers of claims brought by individual employees since the introduction of fees on 29 July 2013. This indicates that employees without deep pockets or alternative sources of funding (such as legal expense insurance or union backing) are thinking twice before issuing claims. 

Single claims (that is claims by individual employees against their employer) have been gradually declining over 2012/13. There was a much anticipated spike in activity in July as those with claims rushed to get them issued before fees were introduced, but since then the numbers have fallen significantly (from 7,000 claims in July to around 1000 issued in September). 

Some of this can be explained by the rush to beat the 29 July “deadline”, but it may also be due to the fact that employees applying for fee remissions do not have their cases entered onto the system until the remission process has been determined.

We know from our own experiences that the remission system is complex and that applications can take several weeks to be considered, particularly if the applicant does not supply all of the correct documents with his original application. This may cause a temporary backlog.

We will not know for sure exactly what impact fees are having on the number of claims lodged for another few months yet. Our best guess is that they will continue to fall.

The fact remains that finding up to £1,200 to have a claim heard at a tribunal will deter many employees – and not just those who might previously have thought that they had nothing to lose by bringing a claim.

Employees with genuine claims may not be willing to take the risk of losing a significant sum of money, particularly if they have not found another job. Employers may therefore find that they are able to achieve settlements rather more cheaply than before.

Will unions be the ultimate beneficiary?

The flip side to the introduction of fees is that employees may wish to try and protect themselves by obtaining insurance cover or joining a union. 

Legal protection insurance is a relatively cheap way of obtaining cover should the employee find themselves embroiled in an employment dispute (although he will usually have to show that he is more likely than not to win and that the costs involved are proportionate). 

Some unions have committed to their members that they will pay tribunal fees and are using this as a “carrot” to entice people to join. It is too soon to know whether this will be successful in the long term, but is something that the Government has not anticipated.

Will employers be expected to pay the fees if they lose?

The simple answer to this is yes, probably. Employment Tribunals have discretion to award fees to successful claimants (even if they have not won on every point) and it is expected that Tribunals will routinely order respondents to pay these. The Regulations relating to the payment of fees is a stand-alone provision and the claimant does not have to show that their employer behaved unreasonably or vexatiously simply to recover the fees he has paid.

Want more information?

Click here to view provisional figures for July - September 2013

Click here to view quarterly statistics April - June 2013

- Fergal Dowling

Key Contact

Fergal Dowling