Employment tribunal claims fell by more than half after introduction of fees
Sharp decline also reflects a surge in the number of people making a claim before the deadline for charges, says law firm.
Claims for unfair dismissal and other complaints against employers fell by as much 55% after tribunal fees were introduced this summer, according to a specialist law firm.
The sharp drop in the number of actions between July and August reflects the imposition of charges for lodging claims and attending hearings, the law firm Hugh James believes.
The steep decline is also partially owing to a surge in cases ahead of the introduction of the fees. Claimants now have to pay £160 to launch a claim and £230 for a tribunal hearing for basic claims.
Employees challenging unfair dismissal, sexual or racial discrimination in the workplace, or sackings arising from whistleblowing face higher charges: £250 to lodge a claim and a further £950 for a hearing.
The Ministry of Justice argues that the charges for the Employment Tribunal Service will save millions of pounds a year. The union Unison, however, launched a judicial review challenging the legality of the charges in October; the high court is owing to give judgment soon.
Emma Burns, head of employment law at Hugh James, said: “There is still considerable uncertainty as to whether the new fees are entirely lawful. If the new fees are abolished we’re likely to see a sharp rise in employees pursuing litigation against their employers.
“Drawn out workplace disputes that reach the tribunal can have a crippling financial effect on both businesses and workers. Employees now need to consider more carefully whether the cost of launching a claim against their employer or ex-employer justifies the cost and risk of being unsuccessful.”
According to the law firm, the number of claims accepted by the Employment Tribunal Service fell by 55% in August to 7,448 down from 17,153 in July. The figures are taken from MoJ data, Hugh James said.
Comparing the numbers between the second and third quarters of the year, show that employee claims fell by 11% from 44,335 in April-June to 39,514 in July-September. Contrasting it with the same period last year reveal 17% year-on-year fall.
When Unison launched its legal challenge, its general secretary, Dave Prentis, said: “Experience shows that the balance in the workplace favours the employers and pricing workers out of court is unfair and underhand. We are pleased that the Equality and Human Rights Commission are backing our case.”
Defending the fees, the justice minister Shailesh Vara said: “It is not fair on the taxpayer to foot the entire £74m bill for people to escalate workplace disputes to a tribunal. We want people, where they can afford to do so, to make a contribution.
“It is in everyone’s interest to avoid drawn out disputes which emotionally damage workers and financially damage businesses. That’s why we are encouraging quicker, simpler and cheaper alternatives like mediation. Fee waivers are available to people who cannot afford to pay”.