Settlement Agreements and Tribunal Fees

The Labour opposition have pledged to abolish the current Employment Tribunal system if they return to power after the general election in the spring of 2015.

Shadow Business Secretary Chuka Umunna in a speech to the TUC on the 8 September 2014 said:

“The current employment tribunal system is unfair, unsustainable and has resulted in prohibitive costs locking people out of the justice they are entitled to. Affordability should not be a barrier to workplace justice. But it would be a mistake to simply return to the system of the past, where tribunals were so slow that meaningful justice was not available. So if we are elected the next Labour Government will abolish the current system, reform the employment tribunals and put in place a new system which ensures all workers have proper access to justice.”

Since the introduction of employment Tribunal fees in July 2013 there has been a significant reduction in claims. Between the period April and June 2014, 3,792 claims were recorded, which is 70% fewer than in the same period of 2013. Claims for age discrimination and unfair dismissal as a result of pregnancy have fallen by 26%, while claims relating to breaches of the Working Time Directive have reduced by 94%. To recap, there is a Tribunal fee of £250 to issue proceedings, and then a further Tribunal fee of £950 just before the final hearing if the matter proceeds to that stage.

This has proven to be a huge disincentive to Claimants presenting legitimate claims. It has been suggested that ACAS early conciliation has also impacted on the decrease in the number of claims.

It was mooted by the current coalition government in April 2014 that they were considering the costs of the Employment Tribunal fees in light of the significant claims reduction. No further announcements have been made to date. The Labour opposition announcement may trigger the coalition government to respond with an alternative policy proposal. One thing is for certain, this issue will not be going away as UNISON’s challenge to the fees introduction (reported in our previous Employment Matters) has been granted leave to appeal to the Court of Appeal.

No further details of how the Employment Tribunal system would be reformed were disclosed, however employees were left in no doubt that were labour to win the next general election changes are to expected.

If you are involved in any type of dispute or need confidential advice on a settlement agreement or any other legal matter then please book a free consultation to suit you now.

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