Employee claims reduced since introduction of tribunal fees, reveals Eversheds study

A study of 180 companies conducted by Eversheds has revealed that since the introduction of employment tribunal fees in July 2013 more than 40 per cent have experienced a reduction in claims, with the biggest apparent drop being in unfair dismissal claims.

Under the current system, claimants must pay an issue fee and a hearing fee. The hearing fee was believed by the government to provide a second opportunity to settle cases pre-hearing. However, the study results indicate that this has not been the case, with only eight per cent of respondents believing the requirement to pay a hearing fee encouraged settlement and a third (33 per cent) believing the hearing fee has made no difference at all to settlement. Of the remainder, five per cent said that the hearing fee acted as a deterrent to settlement.

Other key findings from the study revealed that 44 per cent of respondents believe the extension of the qualifying period for an employee to be able to bring an unfair dismissal claim from one to two years has led to a reduction in employment tribunal claims; and 41 per cent of respondents feel that recent changes to tribunal rules have enabled them to address weak and vexatious claims.

Partner Geoffrey Mead said that employers’ experience of reducing numbers of claims may explain employers’ apparent complacency regarding the introduction of employer penalties in April 2014.

Mead said: ‘No proud employer will want to be on the receiving end of a new employment tribunal penalty, and yet 66 per cent of employers admit to taking no practical steps, such as reviewing disciplinary and training needs, to prepare for this change.

‘It is clear that the introduction of fees is beginning to have a real impact on the number of claims employers are dealing with. With UNISON’s judicial review challenge having failed, this trend looks set to continue, for the time being at least, although future challenge and change is possible, if not likely. Mediation, however, clearly still has a valuable role to play in the settlement of disputes.’