The Ministry of Justice has this week issued the latest quarterly Tribunal statistics for the period January to March 2014. In that period there was a 59% fall in the number of single claims* brought before an Employment Tribunal in comparison with the same period in 2013. This follows on from the previous quarterly statistics which showed a 79% fall in the number of single claims brought.
(* a single claim is one brought by an individual employee or worker, but can include that person bringing several different complaints)
When the last quarterly statistics were issued, Matthew Hancock, Enterprise Minister, hailed the figures as showing that the Employment Tribunal fee reforms were working, and were stopping small businesses from being "exploited" by employees bringing spurious claims. These most recent figures would suggest that the ET fee regime is continuing to have a significant impact on the numbers of claims being brought. However, it is unlikely that the fall in the number of claims being brought is solely due to a lot of individuals being dissuaded from bringing what would otherwise have been spurious claims. It has been pointed out by Michael Reed of the Free Representation Unit in one of his excellent blogs (http://workingtheory.co.uk/2014/remember-those-vexing-claimants.html) that if fewer spurious claims are being brought, it would mean that more of the remaining ones would be strong claims, and in turn that there would be likely to be an increase in the rates of settlement and successful claims at ET hearings. However, there appears to have been virtually no change at all in these rates (again, see Michael's blog), which wouldn’t appear to suggest that the claims now being brought are any more meritorious ones than before ET fees came in.
It is hard for me to reach a conclusion other than that the main effect of the ET fee regime has been to make claimants think twice (or three, four or five times…) before issuing a claim (and then in more than half of those instances not doing so).
A possible side effect of ET fees is an increase in "forum shopping", ie employees are pursuing low value claims for unpaid wages in the County Court which costs less than the ET. So far as I am aware, there are no accurate statistics available which show that there a clear increase in employment-related County Court claims but there is anecdotal evidence of this being the case. Thinking about it logically, if your potential claim was for, say, 2 days unpaid holiday, wouldn't you bring a small claim in the County Court rather than issuing an ET claim and having to pay £160 issue fee? I know I would.
I mainly act for employers, and at face value I can see why the likelihood of facing ET claims has significantly reduced is good news. However, at a more fundamental level I have significant concerns that the reduced number of ET claims does not mean that employers are treating their staff in any better a manner than they were previously. I find it hard to believe that ill-treatment of employees, particularly discrimination against pregnant women, disabled employees, or penalising those who have spoken up about potential wrongdoing has suddenly stopped happening or reduced by a significant margin; it is just that claims about these kind of wrongs are just not being brought. That could mean that poor practices become entrenched in a business, and in the long run that is damaging in terms of staff turnover, morale, absence levels, performance and so on.
That is poor treatment and a backward step.
That good treatment matters to employees a lot doesn’t really need explaining. That this should also matter to employers also shouldn’t need explaining either, but if any more reasons than the few obvious ones mentioned above are needed, getting into a habit of poor treatment of employees is a risky approach because it could come back to haunt the unwary. This is because I think it is unlikely that the ET fee regime will stay as it is in the long-run.
Unison is taking its failed judicial review challenge to the legality of the ET fee regime to the Court of Appeal. That is due to be heard in July and the most recent statistics will no doubt form a key part of the information Unison will rely on. If the challenge is successful it is possible there will be a forced change to the ET fee regime in the short-term. However, even if the challenge is unsuccessful the government has hinted that it will review the ET fee regime anyway, and the statistics would suggest that they have been too successful, which could mean action is taken to soften the regime. Employment rights are high on the political agenda, and as we come up to the next election ET rights will become an integral part of that debate.
What does all this mean?
If you are an individual who thinks you may have been treated badly by your employer, don’t assume that it is going to cost you a fortune to do something about it. Take specialist advice as soon as possible, you may be able to take steps to secure compensation without having to pay a fee.
If you are an employer please don't think that you can now act without fear of being the subject of an ET claim by an employee. Employees may be able to secure remission of the fee, and if they have paid the fee and issued a claim, they are likely to be more driven to pursue that through to a hearing than might otherwise have been the case. There remain many very strong reasons for ensuring that you act in accordance with best practice when you are managing any employee issue.
For more information please contact email@example.com.
(Thanks to Michael Reed for allowing me to refer to his blog in this article)