Scottish lawyer PAUL McCONVILLE is concerned about the impact of rule changes to Employment Tribunals.


Employers hate employment tribunals. Whilst some companies might have insurance cover for such matters, or access to one of the organisations that provides assistance on these issues for payment of an annual fee (a bit like going to Green Flag or the AA for breakdown cover) many – particularly small businesses – are faced with a choice of acting for themselves – with the risks that can bring – or engaging a solicitor to represent them.

The legal costs incurred by an employer can, especially if a full hearing proceeds over a number of days, run into thousands of pounds. The CBI and other employers’ organisations have campaigned for many years to clamp down on the number of Employment Tribunal claims, for this reason. The Government therefore has been looking for ways to reduce what are called the “vexatious” applications which are “hopeless” and exist only to trouble employers.

There has been a large increase in numbers of claims over recent years, although much of this has been caused by the growth of unemployment due to the recession. It is very easy, for example, to make a mess of a redundancy selection process, leaving the employer liable, but as long as they cannot show they have acted fairly.

Normally an employee will need to have had twelve months’ continuous employment with an employer to make an unfair dismissal claim, although if a dismissal falls into one of the “discrimination” categories, (of which there are many) then the minimum period does not apply.

Some years ago the time limit was reduced to one year as a result of a legal challenge on the grounds of sex discrimination. Because generally women had shorter periods of continuous employment than men, the former two year limit was deemed to be indirect discrimination against women – the rule affected far more women than men.Osborne now proposes that the time limit, except in discrimination cases, should go back to two years.

First of all, I wonder of a challenge might be brought to this on the basis that again there will be unfair and disproportionate discrimination against women.

Secondly, that should result in a fall in the number of cases as workers with between 12 and 24 months employment fall out of eligibility to claim. There has already been comment that in fact claimants will circumvent this by claiming “discrimination” but employment judges are very good at clarifying the position as regards precisely in what way discrimination is alleged, and if the Tribunal determines that there has been no discrimination, then the case can fall foul of the time limit. It is not enough to cry “discrimination” – it actually needs to be there.

Of course, there might simply be an increase in preliminary hearings designed to ascertain if there was discrimination or not, and that will mitigate the effect of the change, and in fact might make things worse as, even with fewer cases, there might have to be more hearings.

As matters stand today, there are no costs payable by a claimant when lodging an application with the Employment Tribunal and, unlike some Scottish court cases, no fees payable to the Tribunal as the claim proceeds. Some view this as encouraging frivolous claims, as if a “free bet” for the claimants.The other change and the one which has the potential to be most damaging to a prospective claimant, is the imposition of fees on claimants. The Guardian reports that, “Under the plans, applicants will be obliged to pay the costs of an unfair dismissal claim – £250 for lodging a claim and a further £1,000 if the case goes to a hearing – which will only be refunded if the employee wins.”

This is a remarkable change, and one expressly designed to price people who may have been sacked unfairly out of vindicating their rights. At the present time, in particular, a person dismissed from work might not find it easy to get back into employment and will find their funds very precious indeed. In such a case how is a sacked employee to be able to find the cash to pursue a case to the end? Employers might fell happy to sit tight until, depending on the stage it has to be paid, the claimant has actually stumped up the hearing fee.

I do not see the Scottish Legal Aid Board agreeing to fund new outlays which did not exist before, especially in a class of case they have little to do with just now.

It is possible that the same exemption from paying court costs which applies in Scottish court cases just now might simply be extended. The above exemption allows people in receipt of certain Income Based benefits to be exempt from paying the court fees, for as long as they remain eligible, not for the duration of the case.

But as the Employment Tribunals have a UK wide jurisdiction, I imagine the intention will be to have the same system across the board, and in these straitened times, I can well see the exemption being limited if not eliminated totally.

If I was a potential claimant, recently dismissed, struggling with the DWP to be paid the benefits to which I thought I was entitled, the prospect of having to pay over £1,000 to pursue a Tribunal case would be daunting in the extreme.

And the suggestion that the fees would be refundable if successful are unclear. Does this mean that the Tribunal has to find in the claimant’s favour? What if they win, but their award is reduced to nil? What if a claimant wins on four grounds out of seven, or eight or nine?

Claimants’ advisers would obviously want to insist on employer’s refunding the cost as part of a settlement, but if they are not obliged to do so, will an employee be prepared to proceed to a Tribunal hearing simply to get their Tribunal payment back?

What we have seen here is a blatantly political attack on the rights of the working person, at a time when they are at their most vulnerable.One hopes that the lawyers who act for the main Trades Unions, for example, are poised to see the new Regulations, and mount whatever legal challenge they can.

In a week when the Home Secretary has already called for repeal of the Human Rights Act because it interferers with the work of her department and causes her “problems” we are going to be left again to look to the courts to protect the people. Let’s hope they find a way to do so.

Paul McConville is a lawyer by training and a floating voter. This post was originally published on his website.

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3 thoughts on “A false economy

  1. A very good reason to join a union.

    However I was of the impression that the Tribunal will try & find a settlement before proceeding to a hearing, using ACAS. How will that work? Will the person be charged only if a pre-hearing settlement doesn’t succeed, or will they be charged for just lodging the claim?

    I think with small employers who just can’t count a lot of cases could be settled by lodging the claim if attempts are then made by a third party to mediate.

  2. The Government has dealt a hammer blow to workers rights. How can employees afford over £1,000 for a hearing, when employers are already treating workers like they did in this case which happened under existing legislation.

  3. Putting aside the argument that an upfront fee will discourage and/or price genuine claimants out of the process, there is also that fly in the ointment called the law of unintended consequences.

    There are many reasons why employees feel the need to lodge a claim after being dismissed and they are not always to do with the rights and wrongs of the case. By compelling claimants to put out money up front for their claim to procede, it makes the matter of pre-hearing settlements and compromise agreements just that little bit trickier. It’s my experience that many tribunal claims are resolved, often at no cost to either of the parties, or sometimes with the aid of a relatively small no names no pack drill sweetener. Simply put, if the claimant has to shell out money up front, he’ll want his out of pocket costs back in any out of court deal. The claimant won’t actually benefit from this, it’ll merely compensate for the monies lodged with the tribunal, and the employer will either end up having to pay it, or it’ll tilt his decision away from any such deal and towards taking his chances at the tribunal itself. There’s justice in this for no one, although the public purse might well benefit.

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