Annette Wood: Are businesses right to fear fees ruling?

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The Supreme Court ruling that employment fees introduced by the government in 2013 are unlawful came as a surprise to many, not least minsters who had to make an embarrassing climb down.

Following the judgement, the Ministry of Justice said the government would take immediate steps to stop charging and refund payments, which could amount to up to £32 million.

In January, the government launched a review of the fees, the feedback from which has not yet been published. In the review, it said the introduction of fees of up to £1,200 had broadly met its objectives: to encourage people to use alternative methods of resolving issues such as conciliation and reduce the number of malicious and weak cases.

This was largely judged to be the case as the number of Employment Tribunal (ET) claims had fallen by 79% over three years. However, the Government admitted this was greater than expected and had caused some issues for concern.

The trade union UNISON took the case to court arguing that the making of the fees order was not lawful, because the prescribed fees prevented workers from accessing justice, especially those on a low or moderate income.

As an employment law specialist, I can see both sides of the argument. Evidence has shown that the fees have inhibited people who have genuine claims from bringing those claims forward, although there was the facility for people with little or no financial means to apply for fee exemption. The inhibitor to people being able to make claims for compensation when they have lost their livelihood is harsh for some.

Having said that, I can also understand the IoD’s stance and the fears of some business owners that the judgement opens the door to a spike in malicious or vexatious claims.

Speaking after the court announced its unanimous decision, Seamus Nevin, Head of Employment and Skills Policy at the Institute of Directors, said: “We would urge the government to look again at these requirements in the round, and to examine whether there are ways to prevent employers being subjected to unmerited claims while also ensuring rightful access to justice for legitimate cases.

“There may be ways of improving the fees system by lowering some of the charges or increasing remittances, as suggested last year by the House of Commons Justice Committee, but the prospect of a return to the days of no fees will be a frightening prospect for employers.”

Abolishing the fees does make it easier for unmeritorious claims to be issued, putting employers to time and expense defending such claims.  The reduction in claims when fees were introduced was pretty stark and I think it is not unreasonable to anticipate a rise in claims now the fees have been abolished.

The rise in claims could be mix of genuine and dubious claims.  However, all individuals wishing to make claims will have to go through the mandatory conciliation process and that could filter out the dubious ones or indeed see settlement of genuine claims.

Also, if a worker wants to bring a breach of contract claim in the County or High Court, court fees still have to be paid.

Ultimately, it is very hard for employers to prevent weak claims coming forward. However, robust policies and procedures including a robust recruitment process can help. My advice to both parties would be to use alternative methods of resolving disputes rather than going to a tribunal, not only to avoid the potential cost but also the stress often associated with adversarial litigation.