The Supreme Court ruling that Employment Tribunal fees should be abolished has caused alarm in the business community, with the IoD urging a change of mind.
Seamus Nevin, Head of Employment and Skills Policy at the Institute of Directors, says businesses across the country will be alarmed by the judgement. He said: “The IoD supported the introduction of employment tribunal fees after our members reported in large numbers that they were being forced to settle cases that they were confident of winning because of the inordinate costs and time involved in fighting them.
“Before fees, individuals faced no risk or barriers in bringing claims that were not merited. Even the weakest or most vexatious cases meant sizeable legal expense and wasted valuable management time for companies. The then Coalition Government recognised this very real problem and brought in the fees to redress that balance.
“This judgement opens the door to a spike in malicious or vexatious claims. Since fees were introduced, the Government has imposed crude and potentially misleading gender pay reporting requirements, and an immigration skills charge that incentivises recruitment based on place of birth. Both of these could lead to an increase in unjustified claims.
“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.”
The IoD supported the introduction of fees based on the views of its members, which included:
- More than half (55%) of members had been advised by lawyers that it had a good defence against an employee or ex-employee, but that it would be cheaper to settle than to proceed to tribunal
- Half (48%) of organisations had paid off an employee who might otherwise have taken the case to an employment tribunal even though they were confident of their case and felt the pay-off was unjustified
- 79% of IoD members believed a ‘pay-off culture’ to be a significant or very significant concern with regards to employment regulation
- A third (34%) believed that dismissal procedures, which in 2012 included no-fee tribunals, had deterred them from recruiting new employees due to concerns if the employee did not work out as hoped