Will the new Employment Tribunal fees give employers some protection?

On the face of it the new charges on employees seeking redress for workplace issues via tribunals could be good news for employers, particularly SMEs.

In theory, as the FSB has pointed out, the £160-£250 to lodge a claim and the £230 or £950 fee if the case goes ahead ought to deter weak or frivolous claims that businesses have hitherto felt obliged to settle without contesting for fear of huge legal bills.

A client of mine recently had a male employee who, after a couple of warnings, was then made redundant. Despite ample evidence that he had had several recent girlfriends he then took the company to tribunal, encouraged by a solicitor’s no win no fee deal, for unfair dismissal on grounds of his sexual orientation as a gay man! The company settled out of court for £7000 for fear of high legal costs if they contested in court.

When turning around companies I believe in working with the unions or employee representatives when reorganising staff or redundancy. Indeed K2 now has a former union official who as our ‘Employee Liaison Officer’ specialises in managing the process. Equally, it is important that employers follow all the correct procedures when using redundancy.

However, there are some caveats about how effective a deterrent to weak claims the new payments will be.  Firstly, Unison has been granted permission for a judicial review on the introduction of fees. Secondly, costs can be reduced where there are multiple claims of two or more people against the same employer. Similarly fees can be significantly reduced or waived where a claimant cannot pay.  Thirdly will the new fees deter the “ambulance chaser” lawyers offering no win no fee deals?

In our view the jury is still out on whether this new ruling will make life easier for employers. What do others think?

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