But altering procedures may rebound on employers in the long term
Much of the debate about the fees system in employment tribunals has been focused, quite understandably, on its effect on employees’ access to justice. Questions have been asked about whether the fees regime constitutes an unfair and excessive deterrent to those seeking to enforce their employment rights through a tribunal, given the dramatic and continuing reduction in the number of claims since fees were introduced in 2013.
The government is currently conducting a review of how the regime is operating but many commentators are sceptical about the prospect of any change as a result of this. It seems that tribunal fees will, in any event, be with us for the foreseeable future in some form or other.
Of course, the reduction in tribunal claims should not be attributed entirely to the introduction of fees. The increase in 2012 of the service requirement for bringing unfair dismissal claims from one to two years, as well as the rise in short-term working, self-employment and other labour market factors, have no doubt also reduced the number of individuals eligible, willing and able to bring unfair dismissal claims. Also, recent employment tribunal statistics suggest the Acas early conciliation process introduced last year has led to the resolution of employee complaints in various ways in a significant number of cases.
The impact of the introduction of the fees regime on employer attitudes to risk management with regard to potential employment claims seems in general terms to have received less consideration than its impact on employees. For example, what, if any, impact has the reduction in overall claims had on employers’ approach to the handling of employee issues? Are employers actually factoring in the possibility of an employee not bringing a claim because of the fees involved when determining how to proceed in a particular situation?
In reality, prudent employers will not rush to dispense with dismissal or other procedures which reduce the risk of a successful employment tribunal claim, or to conclude, for example, that a harsher dismissal decision than might otherwise be justifiable is more commercially appropriate. There are no guarantees that employees will not bring a claim, whatever the employer's assessment of the likelihood of their doing so in terms of their financial resources and other factors. To take the calculated risk of dispensing with a pre-dismissal procedure may rebound on the employer, not just if a claim is brought and the dismissal is consequently more likely to be unfair, but also because the compensation awarded as a result of a successful claim could then be subject to an increase of up to 25 per cent. Employment tribunals must consider applying such an uplift in cases where there is an unreasonable breach of the Acas code of practice on disciplinary and grievance procedures.
Many employers will still wish to conduct themselves as far as possible in a manner which is consistent with the requirements of employment law, in order to minimise their legal risk as well as preserving their reputations as good employers. The reality, however, cannot be avoided that to some degree the deterrent effect of fees on an employee's willingness or ability to bring a claim may form part of an employer's overall assessment of its exposure to such a risk and how it decides to deal with an issue.
The impact of the fees regime then becomes one of a number of commercial factors which could influence how an employer decides to deal with a particular situation, such as how good it considers its defence to a claim would be, how easy it would be for the employee to mitigate (take reasonable action to minimise) his or her loss by obtaining new employment, and the viability and attractiveness for all concerned of a settlement, either before or after dismissal.
Charles Wynn-Evans is a partner and Jennifer McGrandle an associate in the employment department of Dechert
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