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The End of Employment Tribunal Fees and How it Might Impact Employers

What the Scottish Government Says About Tribunal Fees

“We will abolish fees for employment tribunals, when we are clear on how the transfer of powers and responsibilities will work.

“We will consult on the shape of services that can best support people’s access to employment justice as part of the transfer of the powers for Employment Tribunals to Scotland.”

This was Nicola Sturgeon’s statement in the run-up to the passing of the Scotland Bill, giving the Scottish Parliament new powers over tax and welfare, which was finally granted Royal Assent recently.

The Big Questions About Tribunal Fees

The big questions surrounding the abolition of tribunal fees are: By what means will it be implemented; when will it happen; who will pay for the new service and how will the changes affect employers?

The first two questions are closely linked.

Indeed, until the methods of implementation are agreed there can be no talk of setting a timetable.

And that is because the process is much more complex than that of simply removing the charges.

How Might the Abolition of Tribunal Fees Affect Employers in England & Wales

How, for example, would the new system cope if an employee in an English (or Welsh) branch of a business with its HQ in Scotland wants to take a case to a tribunal?

Let’s just say for argument’s sake that this company is the Royal Bank of Scotland, with its headquarters in Edinburgh but much of its business outside Scotland. The same applies to Standard Life, Scottish Widows and the Dundee-based publishing giant DC Thomson.

Clearly, the employee would prefer to have his or her case heard in fee-free Scotland.

At the same time, the employer might decide to argue that the jurisdiction should remain south of the Border.

If we get to that stage, it is highly likely that one side would go to court in an attempt to protect its position.

The court’s decision may be the subject of one or more appeals all the way to the UK Supreme Court.

That process alone could take years to complete and the legal costs would be huge.

And if we are still in the European Union then a final appeal to the Court of Human Rights might also take place, heaping more time and money into the equation.

So on that issue alone, Nicola Sturgeon and her team have a great deal of work to do.

The cost of abolishing these fees should also be a major concern to the Scottish Government.

The SNP have always stated that Scotland can stand on its own two financial feet.

Increasing numbers of people find this utopian notion hard to swallow on the back of the unpredictable nature of our main income source, oil.

And, of course, we all know that there is no such thing as a free tribunal. Just like there is no such thing as free prescriptions, or free health care for the elderly.

Employment Tribunals are not cheap and the money has to come from somewhere.

So could this pre-election promise by Ms Sturgeon become yet another justification for the introduction of higher taxes in Scotland?

These are all valid observations. But for employers one of the main fears is will the no-fee tribunal lead to an increase in spurious claims?

But Tribunal Fees Work.....Don't They?

It was the increase in these bogus claims which precipitated the introduction of fees.

And most employers would argue that the fees are doing their job, despite claims by UNISON to the contrary.

There are some interesting statistics available which can be interpreted to show that the current system is working well.

UNISON General Secretary Dave Prentis said: “Evidence shows that since tribunal fees were introduced, the number of employment tribunal claims has dropped by 70 per cent.”

There are two ways of looking at this: either the fees are a deterrent to genuine claims or they are a deterrent to bogus claims.

We prefer the second interpretation. And here is why:

The new fees came in to effect in July 2013.

In April 2014 a new Acas service ‘Early Conciliation’ was introduced and it meant that it became mandatory for employees intending to lodge an Employment Tribunal claim to contact Acas in the first instance, to see if the dispute could instead be resolved through Early Conciliation (EC).

Any case remaining unresolved after EC could then proceed to a full tribunal. Only then would fees become applicable.

In a research paper entitled “Evaluation of Acas conciliation in Employment Tribunal applications 2016”, it is stated: “Among both sides, the most common case outcome was an Acas-agreed settlement, with just over half of both claimants and employers (and their respective representatives) (52 per cent of each) confirming this outcome.

“Six in ten claimants (and their representatives) who had contact with Acas felt that Acas’ involvement was important in helping to move the parties closer towards resolving the case, and of those who settled, 60 per cent agreed that Acas involvement itself was a factor in this decision.

“In terms of ET fees more generally, 35 per cent of claimants reported that they had applied for a fee remission when they made their ET application, and this was higher among those with lower household incomes, and those in open track cases.

“Of those who applied for fee remission, 80 per cent reported that they were successful.”

So what are we to make of this research?

Our view is that the introduction of the early intervention by Acas has helped reduce the need for costly tribunals, which can only be a good thing.

It is also clear that the vast majority of employees who claimed for a fee remission received it.

That last statistic would seem to contradict the claim by UNISON and others that fees are pricing low-paid employees out of the tribunal system.

Now here is the conundrum for the Scottish Government.

Do they keep Acas as a central figure in the tribunal system once fees are abolished?

If so Acas will require a massive injection of resources to cope with the expected explosion in the number of cases.

If not, the Tribunal system itself will require a massive injection of resources.

Either way the SNP are digging themselves into yet another massive financial hole.

There is one final telling statistic from the Acas research, which states: “When looking at all service users in combination (i.e. claimants, employers and their representatives), overall satisfaction with case outcome stands at 69 per cent. This is broadly in line with the 2012 IC survey (72 per cent).

What that says is that the level of satisfaction with the Employment Tribunal system has hardly changed since the introduction of fees.

What was that about “If it ain’t broke don’t fix it”? 

How EmployEasily Legal Services Can Help Employers

Employers facing an Employment Tribunal Claim or the threat of an Employment Tribunal Claim can take advantage of EmployEasily Legal Services free consultation service - contact us today to arrange your free consultation.

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