Justice secretary Chris Grayling defended the reforms to the Tribunal system that saw a 70 per cent reduction in claims.
Since July 2013, claimants at employment tribunals have been required to incur an upfront cost of £400 or £1,200, depending on the complexity of the case.
The first quarter after the changes, Tribunal applications fell sharply by 75 per cent and went even lower to 79 per cent year-on-year. Applications between April and July 2014 were 70 per cent lower compared to last year’s applications on the same period.
The reforms have been criticised by lawyers and trade unions with solicitors suggesting that the sharp drop means some valid disputes are not being heard.
Defending the reforms, Grayling said that the changes have been made to deal with a situation wherein employers are becoming easy preys. He pointed out how easy it was to go to a tribunal and so employers, often the good ones, were getting victimised by questionable claims.
The justice secretary said that the costs of defending a claim are often driving small business owners to just settle claims even though they believe they are right.
Highlighting the fee remission system for low earners, Grayling insisted that there should be some degree of hurdle and commitment for people going to tribunal to lodge claims. He reasoned out that without those, small businesses become very vulnerable which can impact employment.
The Conservative MP for Epsom and Ewell also urged the legal sector to innovate so that legal services will have lower cost.