Tribunal fee threat 'triggers claims race'

Government moves to introduce up-front fees for employment tribunals prompted a spike in unfair dismissal claims in the second quarter of 2012-13, a commercial law firm has claimed.

A total of 15,300 claims for unfair dismissal were lodged with EMW from July to September 2012, compared to 19,600 from April to June – a rise of 44%.

EMW principal Jon Taylor says the increase was triggered by the tabling of the Enterprise and Regulatory Reform Bill, which is set to introduce application fees for employment tribunals and fix a new pay-out cap for unfair dismissal cases.

“People have been racing the bill through parliament, since it was announced last May, to get their claim in under the current claims regime,” he said.  “The government’s proposals will significantly limit the advantages of pursuing an unfair dismissal claim against an employer.

“The government hopes this will reduce spurious claims but the impending deadline has helped to prompt a spike in claims.”

Currently, there are no fees for bringing a case to an employment tribunal and the maximum that can be claimed for unfair dismissal is £72,300.

Under the proposed changes, former employees will be required to pay £250 to open a claim and a £950 if it proceeds to the tribunal. Powers to cap claims will be given to the Secretary of State for Business, Innovation and Skills.

The bill, which is expected to become law in the summer, is the government’s second attempt to ease pressure on the employment tribunal system through changes to the rules.

In April last year, it raised the minimum period that an employee must have worked for a company before they were entitled to make a claim for unfair dismissal from one year to two years.

Analysis of EMW unfair dismissal cases showed that only one in a 100 was affected by the change to the time-limit, the company claimed.