Government on the side of bad bosses

Workers will soon have to pay for employment tribunal hearings on issues such as race discrimination or unfair dismissal...

It’s about to get a lot more expensive to fight back against nasty bosses.

The Chancellor George Osborne has announced that from April 2013 workers will have to pay a fee to bring an employment tribunal against a former employer. Tribunals hear cases relating to unfair dismissal, discrimination and breach of contract.

The charges will be recoverable if a case is won by the worker. The move comes alongside the stripping away of unfair dismissal tribunal access for workers with less than two years' employment.

Unions have condemned the plans as an attempt to silence the vulnerable.

Higher fees payable

Workers will have to pay a fee of between £150 and £250 when making an employment tribunal application, with the actual hearing costing a further £1,000. However, the exact fee levels will be confirmed by the end of November.

Higher fees could be payable where the claimant is seeking over £30,000 in damages. The low paid or those without an income may have the fees waived or reduced.

Tribunal access for those in shorter term employment will also be altered. Currently a worker can bring an employment tribunal for unfair dismissal if they have been in continuous employment for at least one year. From April 2013, this will change to two years.

Those making applications for ‘automatically unfair reasons’ such as discrimination, pregnancy or whistleblowing will still be able to bring a tribunal at any point.

The Coalition’s changes have been attacked by union leaders as a charter for bad bosses to sack workers quickly and easily for no good reason.

Vexatious appeals

The changes – announced by George Osborne at the Conservative Party Conference in Manchester – are designed to deregulate the jobs market and spur on growth.

The aim is to boost employment and enterprise by relaxing labour rules and reducing the risk to small businesses of taking on more staff. The Chancellor said that businesses had the right not to see their achievements destroyed by “vexatious appeals” to tribunals.

The Government claims that the move could save businesses nearly £6m a year and bring down tribunal cases by around 2,000.

But is hitting workers with fees really the best approach to tackle vexatious claims?

Discrimination

As I reported earlier this year, George Osborne has had employment tribunals firmly in the crosshairs for a while now. And – to an extent – he is perfectly justified in doing so.

One thing that is seemingly agreed on across the political spectrum is that Britain needs growth to drag itself out of recession. Job creation in the private sector is vital to soak up ‘efficiency savings’ in the public sector. This simply will not happen if small businesses are too scared to take on employees for fear of expensive tribunals if times turn tough and job cuts are needed.

But this flexibility shouldn’t cost workers their rights.

I wrote back in May that you cannot put a maximum price on disability discrimination or racial prejudice. You cannot put a fee on it either.

By levying a flat-fee on all employment tribunals – including those brought on grounds of discrimination – the Government will be charging some people to defend their basic human rights. This cannot be justified, especially when fairer reforms could be introduced.

No-win, no-fee

A key reason why workers are able to file vexatious claims is the presence of no-win, no-fee lawyers. These allow cheap, low-risk lawsuits to be filed against employers and encourage spurious claims.

Out of 50,900 claims brought in 2009/10, only 5,200 were successful while 22,400 were settled prior to a hearing. On one level, this suggests that these new fees won’t have much of an impact on spurious cases, as the £1,000 fee is only payable on a full hearing. So if a bogus claimant really believes they can get away with a vexatious claim, they’ll probably just shell out the £200 application fee and hope that their boss settles before a hearing.

But on another level, these figures suggest that many businesses are settling cases early to avoid the astronomical legal costs of defending a claim. Claimants are not exposed to these legal costs, thanks to no-win, no-fee.

If the Government really wants to stem the ‘compensation culture’ spreading across our society, it should look at reform of no-win, no-fee. However, any changes in this sector must be handled with care, as – taken alongside cuts to legal aid – there is a risk of slashing lifelines to vulnerable, wronged workers.

Tackling the problems within employment tribunals is a complex task. Introducing fees is too simple a solution.

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