Employers should not rule out the risk of claims

It has been reported that Business Secretary Vince Cable is launching a review into the operation of fees for bringing employment tribunal cases, the results of which are anticipated in a couple of weeks’ time. The review is in line with the government’s promise to monitor the fees scheme. Figures show that there has been a dramatic decrease in the numbers of cases going before employment tribunals since fees were introduced in July 2013.Although this fall may be welcome news to most employers, as the average cost to them of an employment tribunal claim is £8,250, they should not rest on their laurels. Employees now have to pay up to £230 to bring proceedings in an employment tribunal with further fees payable if the case goes to trial. The effect of the regime’s introduction on the number of cases brought has been staggering. Official tribunal statistics show a consistent drop off in the number of cases of around 80 per cent, with the most recent data showing a near 90 per cent reduction in sex discrimination cases.

Challenge The fees scheme has now been challenged in the courts twice by trade union Unison on a number of different grounds. These included arguments that the government had failed to assess the impact of the scheme on the ability of women, ethnic minorities and disabled people to enforce their rights and was indirectly discriminatory against those groups. It has been argued that the scheme renders it virtually impossible, or exceptionally difficult, for a significant number of potential claimants to bring a claim because they could not afford to do so. The challenges were based on the twin principles of indirect discrimination and access to justice.

In the most recent challenge, the court dismissed the argument that the scheme was indirectly discriminatory since there did not appear to be any disparate impact on the groups allegedly affected. The access to justice argument was also rejected – at least for the time being. The court was presented with a number of hypothetical examples prepared by Unison around whether the fee scheme was biased against those on low pay. The problem, as the court saw it, was that there were no real life examples of anyone being forced to back away from bringing a claim because they could not afford the fee (once any remission of the fee on the grounds of financial hardship, which is provided for within the scheme, was also taken into account).

There can be little doubt that the unions will in time find examples of actual employees who have been put off from bringing proceedings because of the requirement to pay a fee. So the issue has not gone away. Indeed, Citizens Advice claimed in December that in a client survey, more than 82 per cent of the 361 clients surveyed considered fees or costs the main reason why they chose not to pursue their claim.

Social policy One of the roles of the employment tribunal may be seen as sending a signal to the employment market that rules on social policy contained in parliamentary legislation are enforced in practice and must, therefore, be taken seriously. Some employers may consider that the drop in cases shows the government has gone soft on the enforcement of employment rights. Those who then cut corners in terms of their employees’ legal rights run the risk of an employee bringing a claim against them. And that risk increases if there is a successful review of the fees scheme leading to more cases being brought in future.

The most significant cause of discrimination claims in particular is the fact that the employee is left in the dark about why he or she was treated in what they regard as an adverse way. In such cases robust and transparent HR procedures are called for, setting out at the first opportunity the real, considered and rational basis for the treatment.

Smair Soor is a barrister specialising in employment law at 7BR Chambers

This article was originally published by CIPD.

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