Having decided that the £84 million cost of running employment tribunals is too high, the government has enacted new legislation which means employees will have to fork out cash to push through a claim for issues such as sexual harassment or wrongful dismissal.

To boil it down, £160 will be required to begin the process of challenging employers. Next up is a fee of £230 to take it to a full hearing – but those fees are £250 and then £950 if the case involves wrongful dismissal, sexual or racial discrimination in the workplace, or firings for whistle blowing.

Claiming the money back, if successful, is then at the whim of the judge who decides costs due for the losing party.

Looking at the statistics, only eight per cent of unfair dismissal claims are successful at hearing – while the equal pay debate garnered a 0 per cent rate.

The decision to introduce fees can be traced back to the 2011 Adrian Beecroft Report on Employment Law. Contained within his study was this little zinger. 

‘It seems likely that such a step [introducing fees] would indeed sharply reduce the number of unjustified claims: at present many claimants who have unfortunately not found a new job have time on their hands and view a free employment tribunal as a no cost option on winning an award.’

So what about industry opinion then? Steve Gilroy, chief executive of business leaders company Vistage, says that, on the whole, it is a sound move.

‘Any employee who has a serious case to pursue will not be put off by the new fees. It helps to re-balance the position between the employer and employee and should help reduce the number of frivolous claims,’ he adds.

On the flipside, Sue Tumelty, founder and director of employment advisory firm The HR Dept, believes that while business owners may cheer, it may not make a difference or be particularly fair.

‘Badly treated employees who may have been cheated out of minimum wage or holiday pay or have been discriminated against may be priced out of justice. Don’t let’s fool ourselves into thinking all bosses are good – some need to be held to account,’ she warns.

Looking at it from an employment law perspective, Anne Pritam, employment partner at law firm Stephenson Harwood, believes that the costs my deter ‘have-a-go’ disgruntled individuals but also make it economically unviable for those pursuing claims for less than the cost of making it.

‘Paying more than a claim is worth to launch will clearly deter genuine claims of low value such as unpaid holiday, notice money or statutory redundancy pay,’ Pritam says.

‘£160 is not the sort of cash most households can easily spare – particularly when the breadwinner has just lost their job, as will be the case with most claimants.’

We will have to wait and see whether the introduction of fees will have an effect on (a) the amount of claims made, and (b) the proportion of successful cases. In theory, getting rid of the bogus claims should mean that most claims are successful.

In the meantime, I invite you all to share your opinion on the issue – whether it is for or against.

See also:

• Employ at your peril – UK and European legislation has ensured that the days of an entrepreneur or CEO being master of his own house with regard to employment issues has long gone.