Ever since 26 July 2017, when the Supreme Court held that Employment Tribunal (ET) fees were unlawful and therefore scrapped with immediate effect, employers have been anxiously waiting to see if there would be a considerable increase in the number of Employment Tribunal claims being made.
The wait is over, and unfortunately the results do not make for good reading.
What do the statistics say?
The Ministry of Justice have now published the provisional tribunal statistics for October to December 2017. These figures highlight an increase in single ET claims by approximately 90% – with a backlog of claims now increasing to around 66%.
The abolition of ET fees was always going to have an effect on the number of claims being made and it is only now that the full effect can be seen. However, whilst the ruling by the Supreme Court should be seen as significant it doesn’t in itself give employees any greater ability to make a tribunal claim.
The increase will most likely effect the lower value cases. For example, in the past, it wouldn’t have been economical to make a claim for unlawful deductions from wages where the ET fee would be more than any amount the employee could recover if successful. From a total of 549 claims in July last year, the number of claims relating to unlawful deductions from wages increased to 2,926 in August and 2,027 in September.
How has the removal of fees affected Employment Tribunal claims?
Before the removal of ET fees, the fees ranged from between £390 and £1,200, with discrimination cases costing the most for claimants due to their complexity and the time the hearings take. The Supreme Court found this was indirectly discriminatory because a higher proportion of women would bring discrimination cases. Subsequently, a scheme was launched to allow people to claim back ET fees. Since the launch, from October 2017 to 31 December 2017, 4,800 applications for refunds were received, and 3,400 payments with a total value of £2.8m were made.
Not only does the government system now have to reimburse fees previously paid, it now has to spread its budget even further to account for the significant increase in the amount new of claims.
At present it is unclear how the government is going to address this issue, but it is apparent that some mechanism will need to be put in place to adequately fund the claims process, without making it cost prohibitive for someone to make a genuine claim. It may be that more claims are sifted out at the initial stages before reaching a substantive hearing.
How can employers avoid claims?
The best way for employers to avoid claims is to make sure they have the correct policies and procedures in place and ensure there staff are fully aware of these. It’s also vital to obtain expert legal advice and deal with any employee issues promptly before they escalate to a claim.
For more information on Employment Tribunal claims, and advice on how to avoid them, please contact Charlie Wood in our Employment Law & HR team on 0161 475 7673.