Press Release - 16 April 2015

Labour manifesto; proposal to scrap employment tribunal fees will be welcomed by many employees, but may cause concern for some employers over ‘spurious’ claims

  • 70% drop in claims since the fee system introduced

Commenting on Labour Party’s proposal today to abolish employment tribunal fees, Paul Quain, Partner at GQ Employment Law, the specialist employment law firm, says:

“Some businesses may be concerned over plans to scrap employment tribunal fees if they come to fruition, as it may mean that they have to face a greater number of claims which can be particularly disruptive to a small business.”

“For small businesses the cost of defending a claim is often completely disproportionate to the value of the claim itself. In some cases this means handing pay outs where they are not deserved. Employees and unions will, in general, welcome the proposals as strengthening employees’ rights.”

“The number of employment tribunal claims has fallen substantially since the fee system was introduced in the summer of 2013. Although the introduction of the fees is not the sole driver for the drop in the number of employment tribunal cases, scrapping the fee system is likely to lead to a large jump in claims.”

GQ Employment Law says that the number of employment tribunal cases has dropped by 70% since the fee was introduced, from 153,000 (2013/14) to 52,000 (2014/15) *.

Employment tribunal fees for claimants start at about £160, rising to £250, with a further hearing fee ranging from £230 to £950.

Paul Quain continues: “Employers often face significant legal fees when defending themselves against disgruntled former employees no matter how weak the claim is and under the current system employers are not usually able to reclaim the cost of defending against an unsuccessful tribunal claim.”

"Equally, however, there appear to be a significant number of strong claims which employees have, but which they are not bringing because they now have to pay to do so. Getting the balance right is always a difficult task for any political party”

“Small businesses probably have the most to lose. They need to be aware of the formalities required when dismissing an employee so that they don’t leave themselves open to attack. Things like paying backdated holiday pay and unpaid wages need to be addressed or they could face potentially expensive claims.”

*Year end December 31st

Press enquiries
Paul Quain
Partner
GQ Employment Law
Tel: +44 (0)20 3375 0334

Nick Mattison or Julian Wadley
Mattison Public Relations
Tel: +44 (0) 20 7645 3636