Proposals to transfer certain functions of the UK Employment Tribunal Service to the Scottish Tribunals could have unintended consequences for the volume of employment claims in Scotland, according to law firm DLA Piper.
The Scottish Government is currently seeking views on a draft Order in Council, the objectives of which are to transfer the administration of employment tribunals in relation to Scottish cases, and to ensure that the resulting tribunal systems in England and Wales and Scotland operate effectively to enable individuals to enforce their employment rights. The Scottish Tribunal will have jurisdiction to hear genuinely “Scottish Cases” along with other cases that have a “sufficient link” to Scotland.
DLA Piper signals that the current proposals could lead to the prospect of 'forum shopping' by Claimants who choose to bring their claims north of the border, despite in practice having very little connection with Scotland in their day to day work. Potential future users of the Scottish Tribunal could include, for example, an employee who has only ever worked in London but whose employer has offices in Scotland, or a worker from Cardiff who has contracted business with customers situated in the Highlands.
The risk is significant due to the likely disparity in fees between the respective tribunals. Following the much debated introduction of fees for employment claims, there has been a considerable reduction in the volume of cases being raised across the UK. It has been proposed by the Scottish Government that fees will not apply to employment claims in Scotland and DLA Piper’s head of employment law in Scotland is warning that such a disparity could lead to the Scottish Tribunals being inundated with claims from employees with tenuous links to business in Scotland.
Kate Hodgkiss, partner and head of employment at DLA Piper in Scotland, said: “The draft proposals have the potential to result in a substantial increase in claims from employees outside of Scotland looking to take advantage of the potentially cheaper Scottish Tribunal system. “The crucial point is that, under these new proposals, Scottish tribunals will have power to deal with any case involving an employee with a link to Scotland, including companies with offices or dealings north of the border. In short, this means that we could see a rise in cases where the connection to Scotland is tenuous at best.
“Although there are provisions for cases to be transferred, and we would expect to see cases with weak links to Scotland being transferred back to the appropriate Tribunal, forum shopping could result in a significant administrative headache for the Scottish Tribunal system and a potential cost burden for employers. In addition, a genuine concern for all parties in valid Scottish Cases will be the resulting delays in dealing with cases where there is a backlog of unexpected claims that have been lodged in Scotland to simply avoid paying fees. Discussions are continuing with all relevant stakeholders but as these continue it is vital for all businesses operating in Scotland to make their voices heard by contributing to the consultation process.”
