Employment Minister Ed Davey, has commented on his view of the tribunal costs on employers and future cases.
In an effort to avoid not only the initial costs but also the possible costs if the case is lost, up to £5000, it is believed that there will be a vast increase in out of court settlements.
It has been mentioned multiple times in the past that the government has a view that there are some who take advantage of the tribunal system as it stands and this leads to numerous vexatious claims. The reforms are seen as way of tackling this as well as reassessing some of the pressure on those who work within the very busy tribunal system. However, amongst all this, we must not forget what is surely and should remain to be, the most important part of our tribunal system and that is of course to achieve justice and fairness in employment matters. This is true for both sides, the master and the servant; the employer and the employee; the company or the individual.
Faced with the possibility of rising costs an employer might simply pay out even where it knows it has done no wrong if it feels that there is a chance that to remain within the tribunal system could lead to a heavy fine. Surely, this is not justice. The problem that is perceived is not against those who make a real claim but rather those people who knowing the price of their employer going to court use this to their advantage.
Alongside the new costs to going to tribunal there are also plans to make ACAS mediation a compulsory precursor to a tribunal hearing itself. All aspects of the reform are aiming to avoid the need to go to a hearing by encouraging an earlier exchange of information for example. This might allow one side to see their case is not as strong as they would have hoped and so to stop now rather than carry on to tribunal. Or it might lead to more compromises being reached not just in terms of money but in working patterns and standards perhaps.
Of course many an employment expert could have guessed that this would be the bad taste left behind following the attempt at making lighter work for those working within the tribunal system. There will be much to lose if you do in fact now lose at tribunal, possibly, fees for yourself and the other party plus compensation and a fine for having allowed the case to progress to this stage.
The sadder consequence of this side affect is that whilst many of the other reforms have been introduced with a view to release pressure on smaller companies as employers, this would harm them the most. These smaller firms, often believed to be the lifeblood of our ailing economy and our future hope, will be the ones who struggle to both pay the tribunal costs or an out of court settlement.
Although figures released by the Department for Business show that those who settle rather than go to tribunal do, on the whole, save money, the costs are still high. Some figures suggest an average pay out of £5, 400. One can imagine the impact this could have on a small business's accounts. In addition the possibility of a £5,000 fine is unlikely to stop a larger, more established company from continuing to tribunal should it believe it has a strong case. Such firms are also more likely to have HR and Legal departments who actually have the time along with the funds to bring the case through to tribunal. Whilst this may have already been the case to some degree, it seems the gap between the smaller employer and the larger, is widening and is not helped by these costs.