The number of employment tribunal claims has dropped by 70 percent since the introduction of tribunal fees in July 2013 leaving Employers split over the future of employment tribunals.

New research by CIPD, the professional body for HR and people development, found that the majority of employers (38%) said it should be left as it is, (36%) believe the fees should be reduced or abolished and just over a quarter (27%) were undecided.

Mike Emmott, Employee Relations Advisor for the CIPD, says:

“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 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“.

The Business Secretary Vince Cable commented on the report saying:

“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 to combat the cost to employers and the number of weak and vexatious claims. Employees can currently be expected to pay up to £1,200 to bring a claim before a tribunal. This has resulted in a 70 percent drop in single claims made between April to June 2014 compared to the same period in 2013.

The reduction in the number of claims is accompanied by greater support for alternative for dispute resolution that seek to find a balance between formal discipline and grievance processes, and more informal methods such as early conciliation and mediation.

The two fastest growing methods adopted by employers in the past 12 months for dealing with conflict have been training line managers to handle ‘difficult conversations’ (47%), and facilitated discussions or troubleshooting by HR managers (38%). Overall, there has been greater emphasis on tackling conflict within the workplace. 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 reduction in 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.

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.