14 September 2016

The Scottish government intends to abolish employment tribunal fees for claims raised in Scotland. We don’t have a date for that yet, and we don’t know the detail, but we can speculate as to the potential consequences.

Employers will remember that for claims raised before 29 July 2013, tribunal claims did not require payment of any fee. Claimants could represent themselves, and as it is very rare that a party ever has to pay the other side’s costs, Claimants could raise a claim, safe in the knowledge that, at worst, it was unlikely to cost them anything. On the other hand the employer had to face disruption, wasted management time, and often significant legal costs.

All that changed in July 2013 when it became mandatory, UK wide, for a Claimant to pay a fee to raise a claim, and also a fee to have a hearing fixed. For a simple unfair dismissal claim the fees would be £1200. Exemption for fees is possible for those in very difficult financial circumstances, but the vast majority of potential Claimants need to pay the fees (or have their Union do so).

The effect of the fees has been well documented. Depending on precisely what statistic you consider, tribunal claims have dropped by 65% to 80%. That is not due to employers suddenly starting to treat their staff better!

While many “unmeritorious” claims will certainly have been discouraged, there can be no real dispute that a great many individuals with claims which were valid and arguable have been dissuaded from pursuing the matter due to the fees they would have to pay. The fear is that the result of the fees regime has been not just to weed out the “nonsense” claims but that it also acts as a real barrier to justice.

Various legal challenges have been made to the UK government’s introduction of fees, and all challenges so far have failed. The SNP made a commitment in their manifesto for this year’s Holyrood elections that if they were in government, they would abolish tribunal fees in Scotland (that power being devolved following the Smith Commission), and that is therefore now very much on the cards.

The proposed abolition of fees raises some important questions. Will we see employees based in England raising their claims in Scotland to avoid the fees, and will the Scottish tribunal system be able to cope?

More importantly for employers, many observers have formed the view over the last few years that some employers are taking their employment law obligations less seriously on the basis that they feel it is unlikely (given the drop in claims) that they will actually have a claim against them. If fees are abolished that attitude will be dangerous, as it can be assumed that there will be a significant increase in claims, perhaps back to pre-July 2013 levels (though there are other factors that have contributed to the decrease in claims such as ACAS early conciliation, protected conversations etc).

Are you comfortable, therefore, that your employment and HR practices are compliant with the law and best practice? Have your managers had proper training in dealing with these issues – managing absence, investigations, disciplinary and grievance hearings, and flexible working requests? Is your holiday pay scheme compliant with current case law? Is your equal opportunities policy up to date, and is it known to staff (or lying in a drawer somewhere)? Are your staff given equal opportunities training?

All these issues should be carefully considered. Prevention is better than cure, and you should carry out a full review of your employment practices to ensure you have no reason to be concerned about any increase in claims. We can assist with all these matters – it is important that expert advice is taken from people who know your business, and steps implemented that are tailored for you and right for your business. Please contact any member of the team to discuss.

Contact: Douglas Strang Senior Associate dst@bto.co.uk T. 0141 221 8012