Have tribunal fees modified employer behaviour when it comes to legal risk?

The government has published its long-awaited review into the introduction of fees in the Employment Tribunals, together with consultation on proposed changes.

The fees were introduced with the objectives of reducing the number of vexatious or unnecessary claims and reducing the cost to the taxpayer, whilst also aiming to protect access to justice. The review confirms what has already been established; that the number of claims being brought has significantly fallen, the average being down by an astonishing 70%. At the same time the new fees have contributed £9million per annum in funding.

The review does acknowledge that there is “some evidence that people who have been unable to resolve their disputes through conciliation have been discouraged from bringing a formal ET claim because of the requirement to pay a fee”, and also acknowledges that the extent of the fall in numbers of claims has been greater than anticipated, but also states that “there is no conclusive evidence that ET fees have prevented people from bringing claims”.

As an HR professional working with small businesses, I see value in a mechanism for reducing the numbers of frivolous/vexatious claims. A business can conduct itself in an exemplary manner and still run the risk of an aggrieved individual deciding to put in a claim just because it’s easy to and to cause difficulties for the employer, or just to see if they can get something out of the situation. That type of claim can be crippling for a small business even when they are not at fault at all.

But how common actually was that situation? I’m sure there were plenty of vexatious claims, but really as a proportion of the number of claims brought, was it really so high as to represent a significant problem?

And while the 70% reduction in claims sounds like headline good news for employers at least, I think in the light of those statistics it is misleading of the government to minimise the extent to which genuine claimants have been put off by the new system. Perhaps vexatious claims have been removed or significantly reduced, but at what cost to genuine claimants?

I am pleased to note the government is proposing to extend the Help with Fees scheme, but from a professional point of view I am interested in whether the introduction of fees and reduction in claims has modified employers’ behaviour?

Employers all keep an eye on risk when dealing with tricky employee relations issues or challenging terminations. HR professionals identify possible outcomes of the various ways forward in these situations, including whether there is any risk of a tribunal claim, and what the probability is that the person would go ahead with a claim. I think it would be disingenuous to claim that tribunal fees and reductions in claims don’t play a role in that risk analysis process.

I recall conversations in the past on more than one occasion, pre-tribunal fees, where a client who had done/was doing nothing wrong was concerned about an employee bringing a claim, and although I advised them they were not vulnerable, they said they were still concerned about this particular employee as it was “the kind of thing they’d do anyway”. Employers might feel more confident treating those types of employees in a more ‘robust’ fashion now. But are employers also feeling more confident about cutting corners elsewhere? Are troublesome employees being dismissed rather more quickly than they might have been before the fee system? Are tricky grievances being upheld less frequently?

It’s a balancing act, ensuring that employers are incentivised to follow procedure and treat employees fairly and lawfully and that employees have access to justice when this doesn’t happen, but that employers don’t end up having to bend over backwards worrying about claims or paying out settlements to avoid drawn-out processes and extensive legal fees when they are not actually doing anything wrong. The staggering reduction in numbers of claims seems to suggest the balance has tipped further than it needed to and it will be interesting to see whether the government’s proposed extension to fee assistance (if implemented) is sufficient to redress that balance a bit.

I’d be really interested to hear views of other HR professionals on whether the introduction of fees has changed the tone of conversations around analysing legal risks in their organisation.


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