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29th July 2013 – fees for claims made at ET

July 24, 2013 9:33 am Published by Leave your thoughts

Fees for making Employment Tribunal claims commence 29 July 2013

Fees for bringing employment tribunal claims will be introduced from 29 July 2013, which has to be good news for employers, particularly small businesses.

In a (maybe) climb down from the original reason for introducing fees, which was to reduce the number of ‘lets take a chance’ claims, the Ministry of Justice (MoJ) now claims it’s to assist with (but not cover) the burden of financing the employment tribunal system to the tax payer. We think either is a great reason, but small business owners should be delighted with this news, where the burden of a claim is far more heavily felt.

Even as a decent employer, a small business can face a claim. Many company’s settle out of court, even if there is absolutely no grounds to the claim at all, and little or no chance the employee will win. While this might seem a crazy decision, to pay someone off when the business has done no wrong, the driver is often practical analysis of cost and time. While large companies have HR teams and sometimes solicitors on their payroll, and can absorb the additional work and tap into expertise and experience, smaller companies don’t have this option. Larger companies are also more likely to be able to bear the cost.

A lot of smaller businesses settle because they don’t know what they don’t know, they panic at a bullish and exaggerated claim, pay up and close it off.  Others stand firm and, clear they have done nothing wrong, go to court and often win. The likelihood is some of these chancy claims from (ex)employees, made to see if there is any easy money to be made, being stopped on account of the fee has got to be a good thing. And that’s got to be good for business. Of course, this is also very good for the claimant. We’ve seen cases of chance claims before.

What will be interesting is to see if some kind of legal aid element kicks in (and the cost of that outweighs the revenue raised by the fees, which would be laughable were we not able to so fully imagine that becoming a reality!). Another possibility is an increase in providers who will stand the cost of the fee for the (ex)employee and try to browbeat through a claim for a higher percentage cut of any award. Or, are we getting cynical?

Let us know what you think!

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