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Employment Tribunal Fees are scrapped: Let’s have one guess what’s going to happen next . . .

Here we go again!  It’s been almost four years since the government ruled that anyone taking a case to an employment tribunal had to pay a fee of between £390 to £1,200, depending on the type of claim.  But now the Supreme Court have ruled that fees ‘prevent access to justice’ and have given the go-ahead for anyone to bring a claim to an employment tribunal without needing to pay. 

The scrapping of fees takes immediate effect and the government has promised to refund fees totalling over £32 million to those who have already paid them.  That’s likely to prove easier said than done, since many claimants have already had their money refunded by way of a settlement while others had their fees covered by their unions.

Our favourite celebrity plumber, London-based Charlie Mullins has already warned that employers will be swamped by spurious claims, while the unions are celebrating their success, but what’s the truth of the matter?

The impact of charging fees:  Employers more likely to win – but still face average costs of £5,000

According to the data I’ve been looking at, in the year before fees were introduced, roughly 5,000 claims were being lodged every month.  This figure then spiked to 8,000-a-month as people rushed to avoid the fee and subsequently levelled out at 1,500 claims a month.

  • Before fees were introduced, 88% of 60,000 cases were either kicked out by tribunal, dropped, or won by employers.
  • Despite fees meaning only the strongest cases went to court, the percentage of claimants winning cases dropped from 12% before fees to 6% last year. 
  • Default judgements – when one party fails to turn up – fell from 3,600 cases to only 720 once fees were introduced.
  • Win or lose, the average legal cost of defending a claim through to a hearing came in at around £5,000, with as much again in staff time and disruption.
  • The direct legal cost to employers of defending these cases dropped from £264million p.a. to £81million p.a.
  • The introduction of tribunal fees also meant the risks associated with hiring new staff were therefore reduced, so now some employers will be reluctant to hire.

Demonstrating the strength of Hudson Contract’s employment guarantee

Here at Hudson Contract, we agree with Charlie Mullins.  While our track record of defending employment tribunal claims is somewhat more successful than his with Pimlico Plumbers – we are able to demonstrate our operatives are genuinely self-employed, and have never lost an employment tribunal hearing – we are nonetheless preparing for new claims.  After all, lodging a tribunal claim against a business will once again be used as an easy-to-deploy weapon.

We also anticipate a shift from those using the fee-charging county courts to free employment tribunals.

On the flip side, the Supreme Court ruling is likely to mean a significant number of construction companies will elect to join the Hudson Contract ‘family’.  This is, of course, down to our watertight Employment Tribunal Guarantee.

So if you’re already a client, you have nothing to fear from the change.  We simply ask you to continue to follow our engagement processes, and to contact us with any disputes before responding to letters, calls or text messages from sub-contractors who look as though they are heading towards the tribunal route.

Please spread the word

If you have colleagues and business contacts who are concerned they will again be faced with expensive claims brought by subbies claiming employment rights, ask them to get in touch with us. 

We have successfully defended many cases over the years, and while tribunals usually come to the right decision, having Hudson Contract on board makes wading through the process far less stressful – and can be a big cost saver.

If you’d like to refer anyone to Hudson Contract, why not do so via our Rewards Scheme

Ian Anfield

Ian Anfield

Managing Director, Hudson Contract

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