By Daniel Hunter
The Forum of Private Business has welcomed the introduction of employment tribunal fees from but does not foresee them bringing about a major change in the system.
The fees will apply for any case lodged from today and are set at two levels, depending on the type of claim being made. All applicants will be required to pay an issue fee to raise a claim. This will be followed by a hearing fee if the case is referred to a tribunal for a formal hearing.
The annual cost of running the tribunal service currently stands at £84 million and the government expects the introduction of fees will go some way to reduce this by encouraging alternative dispute resolution.
The Forum of Private Business would like to see a reduction in the number of spurious claims lodged by disgruntled employees as a result of the introduction of fees. Vexatious claims to tribunals result in a huge cost to small businesses who are not only burdened with costly legal fees but see their businesses suffer in the process. Business owners are required to divert attention away from the day to day running of the company and the laborious process of being taken to a tribunal acts as a disincentive to recruitment, inhibiting the growth of small businesses across the UK.
Research undertaken by the Forum of Private Business shows that smaller businesses (those without a formal HR department) are more likely to resolve disputes at the mediation stage; 80-85% of workplace disputes in small firms are resolved internally.
“Escalating workplace disputes to the tribunal stage is too easy an option for many employees. The burden on the employee is limited whilst employers are not only defending the case in question, but also the reputation of their business. Hopefully the introduction of fees will make claimants think more carefully before resorting to litigation," The Forum’s Chief Executive, Phil Orford, said.
“Our members recognise that employment law is there to protect both the employee and the employer. But when weak and vexatious claims are being made against employers the system is being abused at considerable expense to small businesses employers; they do not have the time, resources or the money to defend vexatious claims and in many cases should not have to.”
The complexity of the disciplinary and dismissals procedure is particularly burdensome for small businesses. Research published by the Forum last month revealed employers spend an average of 12 hours a month on employment compliance alone. In over 90% of our member businesses it is the owner who is responsible for compliance and they welcome our support and guidance through disciplinary or dismissal procedures to help them avoid tribunals.
Given the time and effort to which employers are obliged to devote to compliance, having to defend a spurious claim before a tribunal undermines the entire system. In a research report last year 51% of Forum members said they wanted to see costs awarded automatically to the employer when a claim is deemed vexatious.
“Whilst we do not expect radical change as a result of these fees, the Forum hopes our members will see a reduction in the number of vexatious claims as claimants think twice before initiating legal proceedings," Orford added.
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