Employment Tribunal Fees to Encourage Mediation?

The Employment Tribunal system was set up in 1964 to provide lay people with free access to  enforce their employment rights. Since that time, the number of employment rights  and legal complexities have increased substantially and the system now costs the taxpayer £84m a year to run. In order to reduce this cost, the Ministry of Justice has announced the introduction of employment tribunal fees following a period of consultation. The fees are designed to strike a balance between the needs of business and those seeking to enforce their employment rights and to encourage alternative resolution of disputes, for example, mediation.

From summer 2013 it will cost

• £160 to issue an unpaid wages or redundancy pay claim and  a further charge of £230 if it proceeds to a full hearing.
• £250 to issue an unfair dismissal or discrimination claim and a further charge of £950 if it proceeds to a full hearing.
• £600 for judicial mediation

The fees will be payable in advance by the individuals bringing the claims although this could be reimbursed if the claim succeeds and there will be some exemptions for those on low incomes.

Businesses will generally see this as good news with suggestions that it will curb vexatious or nuisance claims ( the numbers of such claims are in my experience much overstated). Others are concerned that it will deny access to justice, in particular to those who need it most.

The big question for me is, will it encourage parties to seek alternative ways of resolving disputes?  The UK Justice Minister Jonathan Djanogly stated that “It is in everyone’s interest to avoid drawn-out disputes which emotionally damage workers and financially damage business. That is why we are encouraging quicker, simpler and cheaper alternatives like mediation”.  As a passionate convert to mediation I agree wholeheartedly that legal resolution is not the best approach and I have seen first hand how costly it is to all concerned. However to say that mediation is quicker, simpler and cheaper misses the most important point, namely that it is also a far more effective way to resolve disputes.

Mediation unlike formal or legal processes deals with the underlying issues. If used early enough it has a far better chance of resolving matters in a way that enables the employment relationship to continue. Mediation is not about who is right and who is wrong or about making black and white decisions; rather it is about facilitating employees to have a better understanding about each other and empowering them to find solutions.

Whilst mediation can be used at any stage, ideally mediation should be considered well before anyone thinks about pursuing a legal claim when employers can save significant management time and cost in addition to improving employee relations, well-being and engagement.

I am not sure that introducing costs for individuals to issue employment claims will of itself encourage employers to consider mediation as an alternative but if its gets people talking about it then that is no bad thing.

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