Employment tribunal fees to be introduced from 2013

News Article - 06 October 2011
Category: Business

From April 2013 employees will be expected to pay a fee for making an employment tribunal claim against their employer, Chancellor George Osborne has announced.

At present there is no fee for an applicant to make a claim and under the new scheme the low-paid, or those without an income, may also see their fee waived or reduced at the beginning of proceedings.

Mr Osborne was speaking at the Conservative Party Conference in Manchester and vowed to "end the one way bet against small businesses."

He added: "We respect the right of those who spent their whole lives building up a business, not to see that achievement destroyed by a vexatious appeal to an employment tribunal.

"So we are now going to make it much less risky for businesses to hire people."

Last year there were 236,000 employment tribunal claims - of which only some were unfair dismissal claims, earning successful complainants an average of £8,900.

The Treasury revealed that over 80 per cent of employment tribunal applications never resulted in a full hearing, with almost 40 per cent of applicants withdrawing their cases - after their employees had been forced to pay legal fees to prepare a defence. While a further 40 per cent were content to accept an out of court settlement.

The GMB union has criticised the plan and feels there is an underlying reason for taking away the rights of workers.

Paul Kenny, general secretary of the GMB, said: "The very notion that reducing the rights of workers of between 12 months and two years' service to bring unfair dismissal claims will create a single new job is quite frankly absurd. Job creation is not the real reason the Tory party want to take away these rights."

On the flip side, business lobby, the CBI welcomed the move to give small firms the confidence to expand their workforce.

John Cridland, director general of CBI, said: "We have been urging the Government to do everything it can to make it easier for firms to grow and create jobs, and this will give employers, especially smaller ones, more confidence to hire."

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