Employment Tribunal Charges – Another example of ill-thought-out legislation?

Chancellor George Osborne told the Conservative Party conference in Manchester yesterday, 3rd September, that the Government plans to introduce a charge for taking a case to an employment tribunal. The new charging policy is expected to apply from April 2013 and in the interim the Government will consult on the level and structure of the fees.

Litigants will only recover the Tribunal fee if they win their case. The Chancellor believes that this action will reduce the risk to small businesses of hiring new people.

He told conference delegates it was imperative ‘to respect the right of those who have spent their whole lives building a small business not to see that achievement destroyed by a vexatious appeal to an employment tribunal’

The Government also intends to double to two years the amount of time someone must be employed before they can pursue an unfair dismissal claim.

Despite the Chancellors good intentions it seems to be another example of a Government not listening to lawyers and announcing, ill thought out and counter-productive legislation. The vast majority of Employment Tribunal claims (approximately 80% ), settle. Settling usually means that the employer (or their insurer) pays the employee a sum of money, often to prevent a case being heard and running up further legal fees.

If an employee has paid, say £1,000, to bring a claim, who will be responsible for paying this as part of the settlement? The employer! So much for saving them money. The Chancellor appears to have just added another £1,000 to the employer’s bill and earned the Employment Tribunal £1,000. More indirect taxation.