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Employers could face a sting in the tail when new Employment Tribunal fees designed to discourage weak or spurious claims are introduced next month, according to leading Black Country law firm George Green.
From 29 July this year, claimants bringing a claim in the Employment Tribunal face an issue fee of up to £250 to submit their claim followed by a fee of up to £950 before the hearing date. Judges will be able to order the unsuccessful party to pay the fees for the successful party, increasing costs to unsuccessful employers; while the two-stage process may actually discourage both parties from settling and increase the length and cost of cases.
Tim Lang, head of employment at George Green, explained: “The idea was that claimants and employers would be encouraged to reach a settlement away from the Tribunal system, but with claimants paying their own fees, they are more likely to want their ‘day in court’ once they have paid their fee.
“Employers are also likely to bide their time to see if the claimant has the means to continue a case before pursuing a settlement. While some lower-value claims will be less likely to be pursued, cases that do progress may take longer and prove more expensive to settle.”
While some claimants will be exempt from the new fees, those with assets of £3,000 or more are likely to have to pay some or all of the fees. Trade unions have put this figure at three quarters of all employees. This fact may encourage some employees to draw upon the services of their trade union to support their claim, while others may be convinced to join a trade union for the first time, with the union then picking up the tab for their issue and hearing fees.
Mr Lang continued: “Where low earners or the unemployed are exempt from fees or where trade unions are supporting claims, there may be no incentive for these cases to settle early. There could also be an increase in trade union membership or activity as a result of the new fee structure, resulting in more, not less, tribunal hearings.”