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Employment tribunal claims up 66 per cent in first quarter after fee abolition

14 Dec 2017 By Emily Burt

Employers warned over ‘false sense of security’ from fees, which may have promoted poor management practices

Long-awaited statistics on employment tribunals in England and Wales have found that the overall number of claims rose 66 per cent in the three months after fees were abolished in July.

Whereas the number of single claims – for individual grievances such as unfair or wrongful dismissal – jumped 64 per cent in the first quarter, multiple tribunal claims fell 15 per cent, with the number of overturned cases increasing by 42 per cent. 

There were 23,297 multiple claims received in the quarter to October, a decrease of 15 per cent on the same period last year.

Employment law experts have warned organisations to scrutinise their employment practices in light of today’s (14 December) figures, published by the Courts Service, which revealed that the tribunals’ outstanding caseload also rose 37 per cent after London’s Supreme Court found employment tribunal fees unlawful in July.

Following the ruling, the Ministry of Justice “took immediate steps” to stop charging fees for tribunals, and put in place a fee refund scheme for claimants who had paid fees between 2013 and 2017, since the first introduction of such fees.

However, lord chancellor David Lidington confirmed during a justice select committee meeting last month that the government was still intending to charge a fee, but it needed to be careful to ensure tribunals were still accessible and affordable.

The number of employments tribunals brought after fees were introduced had dropped by as much as 70 per cent, meaning that claims may be gradually approaching pre-fee levels.

One possible reason for the decrease in multiple claims could be that some types of multiple claim are also for relatively small amounts – employees making a claim for holiday pay might have worked as a group because it was cheaper under the fee regime, for example.

“Now the fees have been abolished, it could be that those individuals are able to pursue tribunals on their own, and the number of claims is slowly starting to reach pre-fee levels,” Dan Begbie-Clench, partner at Doyle Clayton, told People Management.

Begbie-Clench said he expected that the number of single claims would return to a high level, as the Supreme Court concluded that the introduction of fees “had a substantial impact on the ability of certain groups of people to bring claims, especially people who were trying to recover relatively small amounts of money”.

The number of claims rose from 4,241 between April and June this year, before the ruling, to 7,042 in July to October. In the year from 1 April 2016 to 31 March 2017, however, a total of 88,476 tribunal applications were made, up from 83,031 the previous year, and rising again from 61,308 in 2014-15. But this was significantly lower than in 2013-14, before fees were introduced, when 105,803 employment tribunal claims were brought – and an even higher 191,541 total in 2012-13.

Vikki Wiberg, senior counsel at Taylor Wessing, warned that the abolition of fees would likely lead to a continual rise in the number of claims being made. "Almost immediately following the Supreme Court's abolition of employment tribunal fees, we and many of our clients noticed a spike in claims,” she said. 

“These statistics bear out the scale of this trend – clearly the introduction of employment tribunal fees had the intended effect of dissuading employees from making claims, and their abolition has widened access to justice again." The online tribunal database was also launched in early 2017, she added.

She warned that employers could face serious reputational consequences if they had neglected their employment practices while fees were in place. "Tribunal fees might have given employers a false sense of security, enabling some to relax their management practices on the assumption that employees wouldn't pay £1,200 to take their claims to the employment tribunal,” Wiberg said.

“While this was not to be recommended, these statistics bear out how urgent it is for employers to get their house in order."

Chris Clarke, CEO of AdviserPlus, said employers must not underestimate the importance of equipping line managers to handle workplace disputes following the rise in claims. “With the change in policy to abolish fees, we could see even bigger increases in future,” she said. “Firms should be looking at the disciplinary procedures they have in place and how closely these are being followed, to help them resolve disputes in the best way for both the employee and the employer.”

A refund scheme opened by the government last month means that individuals who paid tribunal fees between July 2013 and July 2017 can apply for a refund via the government website, with an estimated 100,000 claims eligible for reimbursement. Experts have estimated that up to £27m could ultimately be repaid to claimants. The system also allows employers to reclaim fees from the government.

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