Then the rules were changed so costs could be awarded where a case was ‘frivolous’ or ‘misconceived’ or ‘unreasonable’. The terminology has changed, but in general only people who were really off the graph (respondents or claimants) found themselves facing an order to pay the other party’s costs.
Show me the money?
The novelty of costs orders soon wears off when you realise the person you want the money from is unemployed! Most bosses would not go to the lengths of enforcing the sale of someone’s house to get their costs back, and in times of negative equity even that has no practical effect.
Aggressive representatives threaten individuals with costs (even when the claim has great merit). This can intimidate individuals who don’t know how it all works. These are not the same people as the ‘professional claimants’ so frequently mentioned in the Press.
Representatives can increase costs (to both parties) by going round the houses or failing to read the file until the very last moment. It is possible to get costs awarded against representatives, but this is extremely rare. Representatives can run up astonishing fees – we recently heard of £35,000 for a one day simple unfair dismissal claim – no wonder employers are desperate to avoid the experience.
Employers need to be savvier about who they appoint and how to manage costs!
Employment tribunals have an engaging way of telling you to turn up for the day with all your witnesses, only to tell you when you arrive that you must wait till lunchtime, and then you are not going to be heard!
“As tax payers we prefer a lean and cost effective system but as users of a service we prefer sufficient capacity to make sure we are not kept waiting”.
How will it work out?
Most claimants will now have to pay to file a claim. This has always been the case in the county court, but the county court is not primarily dealing with people who are unemployed. It is going to be cheaper to take some claims to the County Court – particularly lower values wages claims.
A last minute rush to get claims filed before the introduction date (29th July) led to a short term surge in claims. It will take a while to find out what the real effect will be.
In Scotland there has already been an application for judicial review to challenge the introduction of fees, on the grounds that this discriminates against women (who are statistically lower paid and thus less able to afford the fees in the first place) and in breach of European law.
Who pays?
Claimants’ filing fees will be refunded by respondents who lose. Respondents will also have to pay fees for various applications and orders. Each party will have to factor that into negotiations around settlement.
We find the majority of individuals we are dealing with have over five years service and earn over £50,000 a year. For them the £250 filing fee (for an unfair dismissal claim) will not be an issue. For the part time cleaner on minimum wage it will be a real hurdle. Who will advise them on how the remission scheme works and help them work out if they can file for free (or at a reduced rate)? At the same time funding for CABS and free advice centres is being cut.
Unscrupulous operators may push even harder to exploit their more vulnerable and lower paid workers, banking on the fact they can’t afford to sue them.
Is this all a distraction?
HR’s role is in great part to help to create the appropriate structures and relationships to profitably employ (and deploy) people within the business. Great HR practitioners know that the measure of our success can never be “How many people sued us last year?”
We are going to use a wider range of influencing skills on those lovely managers who create chaos in the organisation by trying to do it all without any kind of conversation or process. We have relied a lot on “an employment tribunal won’t wear that”. At least for a little while those managers are going to think – “oh yes, but who is going?” Now we have to make a case for treating people appropriately that goes beyond ‘compliance’.
Has this inspired you to discuss HR? Leave your comment telling us your view on tribunals.
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