Higher legal fees 'allowing companies to mistreat staff'

Unscrupulous firms are getting away with discrimination and mistreatment of staff after new legal fees saw a massive drop in employment tribunals, lawyers claim.

Employment tribunal claims dropped 56 per cent in the Midlands last year after new fees were introduced, according to new figures from the Ministry of Justice.

There were 68,567 claims in the Midlands between July 2012 and June 2013, compared to 29,984 in the year following the introduction of fees in July 2013.

Legal experts claim costs of up to £1,200 introduced by the Justice Secretary in July 2013 were a barrier to justice and opened the door to companies mistreating their staff.

Mike Hibbs, chairman of Birmingham Law Society's employment committee, said there were "a great many" genuine claims which were not being presented to tribunal as a direct consequence of the fees.

He added: "As a consequence of the fees, many potential claimants are forced to face the harsh reality that, although their employers have acted in breach of employment legislation, the only barrier to justice is the cost of presenting a claim to tribunal.

"Many acts of discrimination will go unchallenged as employees cannot afford to pursue claims against rogue employers.

"The balance has certainly shifted away from employees who ought reasonably to be able to consider that they are protected in the workplace.

"Many unscrupulous employers will now feel that they can act unfairly without much risk that they will be challenged in tribunal."

Under new guidelines, claimants have to pay £160 to launch a claim and £230 for a tribunal hearing for basic claims.

Those challenging unfair dismissal, sexual or racial discrimination in the workplace, or sackings arising from whistleblowing, face higher charges: £250 to lodge a claim and a further £950 for a hearing.

After the initial annual fall, figures for the nine months to March 2015 suggest the decline has continued, with just 12,366 claims made in the Midlands.

If this trend continued for the rest of the year, it would reflect a further 45 per cent drop in claims from the previous year and a 76 per cent drop from the year before fees were introduced.

In the Midlands, age discrimination claims rose by 25 per cent in the year following the introduction of fees but sex discrimination cases were down 64 per cent, race discrimination cases were down 47 per cent and disability discrimination claims were down 45 per cent, while claims for unfair dismissal fell 59 per cent and claims of poor treatment for pregnant women fell ten per cent.

Mr Hibbs, a partner at Shakespeare Martineau, said the fact all claims were now required to enter a period of conciliation with ACAS was also thought to be having an effect.

He said: "There are a number of reasons why there has been a significant reduction in tribunal claims since the introduction of the fees in employment tribunals, most significant is that all claims are required to enter into a period of conciliation through ACAS prior to a claim being lodged.

"Figures obtained for the first quarter this year show that 48 per cent of claims are settled through ACAS prior to submission of a claim to tribunal.

"This is a positive outcome for both employees and employers neither of whom have to bear the cost of litigation in the tribunal."

Across Britain, there were 360,820 claims made in the year prior to fees being introduced, dropping 62 per cent, to 135,845, in the year after fees were introduced.

So far, in the nine months to March 2015, there have been 111,171 claims and, if the trend continues for the rest of the year, that would represent a 9.1 per cent increase in claims in the year July 2014 to June 2015 compared to the previous year, although numbers of claims would be 60 per cent lower than before fees were introduced.

Nuala Toner, from Warwickshire-based employment law specialists Nualaw, said: "Nualaw has seen a marked drop in claimants able to bring claims especially those on lower incomes where the average awards are rarely more than double the fee payable.

"Many cases settle prior to issuing proceedings which can avoid having to pay a fee but those which settle at the 11th hour mean that claimants end up paying £1,200 without any means of claiming it back and without having their cases heard.

"Employers are able to take advantage of the fee system knowing that an offer to settle reduced by the amount of fees payable is now more palatable to claimants and that those who on a low income or who work part time are very unlikely to be in a position to pay the fees."