Employment tribunal fees and employment lawyers

Background

Since 1964 and up until July 2013, individuals were not required to pay any fees to take their claims to a tribunal (Parliament, UK).

From July 2013, the coalition government put a fee system in place, meaning that any individual who wanted to take their claim to an employment tribunal, had to pay a fee to do so.  Those fees varied according to the type of claim and the person’s individual wealth.  

The impact of introducing a fee system to the tribunal meant that:

• There were fewer claims being taken to the employment tribunal (some estimates say that employment tribunal claims were down by up to 79%)
• Because there were fewer claims, there was less demand for the services of employment lawyers.
• Because there was less demand for the services of employment lawyers, the impact to law firms/employment lawyers was:
  • Some law firms made existing employment lawyers redundant.
  • Some law firms stopped recruiting employment lawyers.
  • Some law firms did not offer trainees a post-qualified position in employment, simply because there wasn’t the work on offer to enable them to do so.
  • Many law firms did not replace employment lawyers who chose to leave.
  • Most law firms marketed their service offering differently, to concentrate more on ‘non-contentious’ type employment work rather than focusing on tribunal work.
  • Many existing employment lawyers did not bill as well in subsequent years and therefore many did not see their salary rise by much and or may have missed out on promotions to partnership.

However as of yesterday, any person taking a claim to an employment tribunal will not incur a fee to do so. Individuals who previously paid an employment tribunal fee (in the period from 2013-yesterday) can now be refunded.  This means that employment tribunal claims are likely to increase again (possibly, but not necessarily to the levels seen back before the fee regime was introduced). That increase is likely to mean demand for employment lawyers.

What the impact of the u-turn on fees means for employment lawyers

Demand for employment services is likely to increase.

The increase in the demand for work means the following impact is likely:

• Employment lawyers are likely to change the marketing of their employment services to attract tribunal work once again.
• Employment lawyer services are likely to be in demand. For individual employment lawyers, this means their billing capacity may rise.
• As a result of the likely increase in an employment lawyer’s billing/work received, their prospects for a higher salary/promotion/flexible working are likely to be improved.
• Trainee lawyers who want to qualify into employment may be encouraged to do so.
• Lawyers who previously wanted to qualify into employment but took another role in a different practice area, may now be able to find a role in employment.
• Employment lawyers who want to jump ship to another firm, will probably be able to do so. There’s likely to be a (rapid) increase in employment roles from 0-5 years’ PQE in particular.

What the impact of the u-turn on fees means for law firms

For employers, the following is likely:

• Firm marketing is likely to change to attract employment tribunal work once again.
• Firms who have trainees coming up to qualify might now be looking to offer those lawyers post-qualified positions in their employment teams.
• Firms may create employment vacancies (new growth roles) to deal with the increasing demand from their clients.
• Firms may have to be commercial and increase employment lawyer salaries, offer promotions, improve flexible working initiatives and make other changes to their teams in order to retain their best employment lawyers.
• Firms may lose their employment lawyers to competitors. This is particularly likely if they are not looking after their best people. It doesn’t necessarily mean increasing salary; it may mean finding other ways to retain staff.
• Firms who cannot adapt to a likely change in market conditions for employment lawyers risk losing key clients and staff.

Contact us

For further information on market conditions and or an informal discussion (either as an employer or a candidate) please call 01603 516261 or 07960 743650 or email info@olsenrecruitment.khdigitaldev.co.uk

References

2015, July.  Impact of employment tribunal fees.  Retrieved from from: https://www.parliament.uk/business/publications/research/key-issues-parliament-2015/work/employment-tribunal-fees/