To ask the Secretary of State for Justice what guidance has been issued to employment judges on the award of costs in employment tribunals since 2010; whether he intends to introduce further legislative measures to facilitate the recovery of costs incurred by small businesses as a result of having to defend themselves against an unfounded claim; and if he will make a statement.

I have been asked to reply on behalf of the Department for Business, Innovation and Skills.

Lord Justice Underhill's 2012 review of the employment tribunal rules of procedure considered the issues of costs and guidance. One of the principal recommendations of the review was that the Presidents of the Employment Tribunal would issue Presidential Guidance to give all parties a better idea of what to expect at various stages of the tribunal process. The Presidents may consider the issue of costs as part of this work, but no specific guidance on costs has been issued since 2010.

The Underhill review also examined the costs regime in detail and concluded that there was no reason to change the substantive criteria for awarding costs or wasted costs. Government has accepted this assessment. However, from 29 July, claimants now have to pay a fee to bring an employment tribunal case. Fees will help claimants consider whether alternative forms of dispute resolution, such as the free conciliation service provided by ACAS, would be more appropriate for resolving their workplace disputes. Also, from April 2014, prospective claimants will need to contact ACAS and consider early conciliation before they are able to proceed to an employment tribunal. Both measures should help to discourage individuals from bringing unfounded claims.