Employment Tribunal Fees – a Shock to the System

Monday marks what is probably the most profound change in the Employment Tribunal system since Industrial Tribunals were given jurisdiction to hear unfair dismissal claims back in 1971. For the first time a claimant will have to pay a fee in order to bring a claim – and another (larger) fee before that claim can be heard. For details of the scheme you can consult this handy factsheet.

So what impact will the fees have on the number of Tribunal claims? Back in April the Telegraph published an article claiming that there had been a spike in Employment Tribunal claims ahead of the introduction of fees and other reforms. This was nonsense. With a three month time limit for bringing a claim, anyone dismissed that far back would have had to bring their claim before the fees kicked in anyway. Nobody with any sense would genuinely believe that those statistics were affected by people bringing early claims to avoid paying fees and the law firm EMW who wrote the press release should be ashamed of themselves.

Now, however, a sudden spike in Employment Tribunal claims is exactly what we should expect to see. I would be willing to bet that more ET claims are submitted this week than in any other week since, well, ever.

The reason is simple. Once you are dismissed (or discriminated against or suffer a deduction in your pay etc) you have three months to submit your claim. So if you were dismissed on 2 May 2013, the last day you can submit your claim will be 1st August. But you’d be a fool to wait until that last day, because if you submit your claim on 29th July or later you will have to pay the fee. The sensible thing to do is make sure you get your claim in this week when no fees are payable.

The same goes for anyone dismissed in May June or July this year. Normally your deadline would be in August, September or October – but if you can get your claim in before Monday 29th July you can avoid paying the fee.

This may not affect the overall statistics too much because August and September are likely to be pretty quiet. But the effect will still be significant. As I write this, lawyers up and down the country are frantically knocking potential ET claims into shape so that they can be submitted before the deadline. Some of those claims could have been avoided if the parties had been free to spend the next three months trying to negotiate a settlement.

I only hope the Tribunal service can cope with the extra admin.

The bigger question is what happens after the fee regime kicks in properly (this is assuming that the legal challenges to the scheme launched by Unison and Fox & Partners are unsuccessful). What impact will the need to pay a fee have on the overall levels of claims? Who will be deterred?

Frankly, none of us have a clue. The key period is the end of October onwards. That’s when people whose claim arose after the fees were introduced will be submitting their claims. It could be that the number of claims falls off a cliff and law firms up and down the country discover that they have too many people in their Employment Law Department. It could be that there is no real change or perhaps just a slight drop off in numbers. Perhaps the admin will prove to be too difficult and the whole system will grind to a halt amid a huge backlog of unresolved applications for remission.

This autumn will be a fascinating time for those of us who observe and comment on the Employment Tribunal system. But it may be a pretty stressful time for the people who actually work in it. Good luck guys.

About Darren Newman

Employment law consultant, trainer, writer and anorak
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