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CIPD research reveals that employers are divided on employment tribunal fees as cases drop by 70%

Employers are split over the future of employment tribunal fees, which have resulted in a substantial 70% drop in the number of employment tribunal claims made by employees since their introduction in July 2013.

New research by the CIPD, the professional body for HR and people development, found that the majority of employers (38%) said that it should be left as it is, but a similar number (36%) believe that the fees should be either significantly reduced or abolished altogether and a quarter (27%) were undecided on what should be done. 

The report, Conflict Management: A Shift in Direction?,is based on a survey of 1,000 employers and highlights the CIPD’s call for business to take a more proactive approach to managing conflict in the workplace while exploring the impact of recent legislative changes, such as fees. It closely follows calls from Business Secretary Vince Cable for a review of the new fees system to be progressed “as a matter of urgency”.

Commenting on the report, the Business Secretary Vince Cable said: “It's vital that the employment tribunal system strikes the right balance between employee and employer protection. I welcome this report from the CIPD and its valuable insights. The fact that employers are so split over whether the introduction of tribunal fees has been a good or a bad thing further reinforces the need for a review, despite opposition in some quarters. I've now set one in motion in my Department‎.

The fee system was introduced as claims can cost employers several thousand pounds and an average of 19 working days for each individual case. Currently, employees can expect to pay up to £1,200 to bring a claim before an employee tribunal, a fee put in place in order to reduce the number of weak or vexatious claims. The knock-on effect of this has been a 70% drop in single claims made between April to June 2014 compared to the same period in 2013*.
Mike Emmott, Employee Relations Adviser for the CIPD, comments: “The introduction of fees has had a major impact on the behaviour of both employees and employers. The drop in claim volumes is unprecedented and shows just how far the terms of trade have shifted. Employers have long complained about the damaging effect that weak or unsubstantiated claims have on their business but given the staggering drop in claims since, it must be the case that some perfectly valid claims have been discouraged as a result of the new fees. Fees may not make it impossible for claimants to pursue their case but they’ve certainly made it more difficult, which begs the question: are we putting too high a price on justice?”
“It’s unlikely that the current fees regime will survive the General Election in May by many months as all three major political parties have indicated an intention to review it. Assuming that fees survive in some shape or form, it will be important to get the balance right between having a fee structure that is simple to understand and one that is proportionate to the type of claim being made.”
The reduction in claims volumes is accompanied by greater support for alternative forms of dispute resolution that seek to strike a balance between formal discipline and grievance processes, and more informal methods such as early conciliation and mediation.
The CIPD’s research indicates that the two fastest growing methods adopted by employers for dealing with conflict over the last 12 months have been training line managers to handle ‘difficult conversations’ or managing conflict (47%), and facilitated discussions or trouble shooting by HR managers (38%). In general, there has been greater emphasis on tackling conflict within the workplace.  Almost a quarter (24%) of employers conducted internal mediation by a trained member of staff compared to almost one in ten (9%) who relied on external mediation. 
The combination of reduced claims and ongoing emphasis on conciliation and mediation has led some employment lawyers to anticipate the possibility of a marked reduction in the role of the law in the dispute resolution process.
Emmott continues: “Conflict in the workplace can harm both employee wellbeing and productivity so it’s important that businesses build cultures that both minimise and prevent conflict from occurring in the first place. The CIPD has long promoted better people management, including the use of mediation, to deal with problems rather than simply relying on formal procedures and defaulting to a reactive stance on conflict. “It’s encouraging to see how many employers are making use of alternative methods of resolving issues and it’s welcome news that more managers are getting mediation training. This will improve the quality of conversations between them and their staff and help to defuse conflict before it can escalate; prevention is better than cure. “However, many managers are still stuck in a procedural paradigm, worried that any departure from established procedures will expose them to criticism and possible legal challenge. Better training in conflict management will give them the confidence they need to tackle issues when they arise. To support this, we also recommend that Acas should consider amending its Code of Practice on disciplinary and grievance procedures so as to give more guidance on mediation and performance management to support both line managers and HR professionals.”

Other key findings in the report include:

  • Some employers are critical of the early conciliation process, often on the grounds that they are given insufficient information at the outset of a case to decide how to respond.
  • One in three employers surveyed made use of compromise or settlement agreements and a similar proportion reported that they have made more use of them in the last year.
  • Few large employers are interested in making use of the extended ‘without prejudice’ provision in recent legislation, believing that it offers them inadequate protection against possible tribunal claims.
  • Public sector organisations surveyed make more use of every method of managing conflict compared to those in either the private or voluntary sectors. In each case the difference is significant and in the case of mediation it is substantial. 

A further CIPD report on conflict management - Getting Under the Skin of Workplace Conflict - explores the sources of conflict in the workplace and will be available at the end of March 2015. *Data from Her Majesty’s Courts and Tribunal Service

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