Before the introduction of employment tribunal fees in July 2013, employment tribunals were struggling to deal with the vast number of cases.
Employment lawyers and HR practitioners alike will remember the unavailability of Judges and lay members which led to the risk that cases would be adjourned at the last minute.There was a decrease of 67 percent in cases lodged at employment tribunals immediately following the introduction of fees according to a House of Commons Briefing Paper on Employment Tribunal Fees. Most HR practitioners would agree that that there has been a seismic change in how employment disputes are now resolved. The question for employers and employees is what other dispute resolution mechanisms are available to hear their disputes.
Mediation was suggested as a practical alternative to litigation. Judicial Mediation was piloted in 2006 with no fees for the claimant or the respondent. It was subsequently rolled out across England and Wales with a fee of £600 which is paid by the respondent. This is significantly less than the typical fees of private mediation which are typically about £2,000 plus VAT in more than 75 percent of cases. The Employment Mediator website (www.employmentmediator.com) carried out a survey of employment lawyers on mediation in August 2014. 84 percent of employment lawyers surveyed confirmed they had recommended mediation to a client in the previous three years. However only 2 percent had attended ten or more mediations, 53 percent between one and four and 34 percent hadn’t attended any. This shows that despite mediation recording a very high satisfaction rate from clients it is clearly only taken up in a minority of cases.
The reason put forward for this was that only certain cases would be appropriate for mediation, such as those where there is an ongoing employment relationship that could be salvaged. Time will tell if judicial mediation will perhaps be reserved for high value claims where both legal fees and compensation may be substantial if the matter proceeds. There may also be an inbuilt reluctance for respondents to pay for judicial mediation until they see whether the claimant will be prepared to pay the hearing fee; by which time much of the preparation cost for trial has been incurred.
ACAS Early Conciliation was introduced in May 2014. It is now mandatory for employees to contact ACAS to attempt to resolve the conflict through the Early Conciliation procedure in order to commence the employment tribunal claim. The Employment Tribunal Fees Briefing Paper, issued 15 September 2015, records there were 83,400 “notifications” received by ACAS from employees and employers in 2014/2015, compared to around 18,300 claims brought in employment tribunals in the same period. Of the 60,800 notifications made to ACAS in the period April to December 2014, 15 percent were formally settled and 22 percent progressed to an Employment Tribunal. However 63 percent were neither settled through ACAS nor progressed which covers the situation where cases were settled informally or the claimant didn’t continue the claim. Perhaps the high number of notifications come from claimants testing the water to see if settlement could be reached through ACAS who find that there is unlikely to be a settlement or are deterred by the high tribunal fees.
HR practitioners will have noticed that straightforward type A claims, for example, a deduction from wages, are typical cases to be settled through the ACAS early conciliation process. In the ACAS Early Conciliation 2015 Report, ACAS identified two internal variables that they submitted had a significant impact on the likelihood of reaching a settlement: how many times the parties were contacted by a conciliator and whether the conciliator relayed proposals and offers to and from the employer. External factors also included the nature of the employment sector and whether the claimant was a member of a trade union. It was also noted that public sector employers were more likely to reach a settlement as would those in a larger workplace.
In general, ACAS clearly regard the early conciliation procedure as a success. Across the board employment lawyers and HR practitioners have learned to work with the ACAS Early Conciliation procedure which has proved efficient in knocking out claims which are clear cut and of limited value. Judicial or private mediation are still viable options should ACAS Early Conciliation be unsuccessful and the respondent is prepared to pay the court fee. Early settlement is the best outcome for employers and employees alike in the majority of cases. It enables resolution of the dispute without huge cost and in a timely manner without the delays that typically arise in employment tribunal cases. Going forward, it is predicted that only more extreme cases will overcome the financial hurdles to be heard in employment tribunals.