Legal firms predict cut in tribunals

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Fewer employment tribunal cases will be brought against businesses in Scotland, lawyers predicted today, as a controversial shake-up of the claims system came into force.

However, trade unions were expected to lead protests against the changes, which will see employees having to pay up to £1,200 to have cases of unfair dismissal and discrimination heard.

Unite said it would pay legal fees for its members. The GMB was due to stage a protest outside an employment tribunal in central London.

Kim Pattullo, head of the employment team in Scotland for law firm HBJ Gateley, said the new legislation, which will affect businesses on both sides of the Border, was likely to lead to a fall in the number of tribunals.

“A huge amount of time and effort is currently wasted each year as HR departments across the country deal with what turn out to be groundless tribunal claims,” she said.

“The changes should help ensure that legitimate claims are dealt with effectively and in a timely manner.

“The tribunal service has been under a huge amount of pressure in recent years and spurious claims cost the government, and Scottish businesses, a huge amount of money every year.”

Claims presented from today will be subject to a fee, which will vary depending on the nature of the case brought. While simple claims will require a fee of £160, complex ones dealing with unfair dismissal or discrimination may attract an “issue fee” of £250 plus a hearing fee of £950.

Eilidh Wiseman, a partner in the employment team at legal firm Dundas & Wilson, said the overhaul had the potential to cut out unwarranted claims.

“I believe anything which helps reduce frivolous claims and speeds up the tribunal system will be welcomed by employers,” she said.

“Although fees may act as a deterrent, they should not affect those who are low paid. A new system will be introduced for those who cannot afford the fees to have those waived or reduced. 
A successful claimant should also expect any fee to be paid back as part of any settlement.”

She said the new system could trigger a rise in the value of settlement offers for low-value claims, saying: “Offering £500 as an economic offer to settle is not likely to be attractive to a claimant who has paid £1,200 to bring a claim.”

A number of other changes to UK employment law, including rules to speed up the process of employment tribunals, will also come into play.

Wiseman said: “The good news for employers is that one of the other changes introduced will see a cap on claims for unfair dismissal.

“Currently the cap is £74,200, but from 29 July, the cap will be the lower of £74,200 or one year’s salary.

“This is a welcome change, as it helps manage employees’ expectations when bringing a claim and provides greater certainty to employers when negotiating any claim.”

But Unite general secretary Len McCluskey said: “What we are seeing today is injustice writ large as this worker-bashing government takes a sledgehammer to workers’ rights – this is a throwback to Victorian times.

“Seeking redress for unfair dismissal and discrimination and other injustices in the workplace is a fundamental human right – but now ministers are putting up insurmountable financial hurdles for working people in pursuit of justice.

“We estimate that this will affect 150,000 workers a year. This is not an aid to economic recovery, but a means to keep working people frightened and insecure.”