Employment Tribunal Fees Revisited: One year later

It is now just over a year since fees were introduced for new claims in the Employment Tribunal, the venue where disputes between employers and employees are heard. Claims can be brought on the basis of many different types of unfair and/or unlawful acts including where the employee believes they have been unfairly dismissed, discriminated against at work, or are owed unpaid wages.

Historically there was never a fee payable in order to bring a claim; however, under the Coalition Government, from 29 July 2013, substantial fees were introduced. It can cost £1200 to bring a claim for many types of common claims and an extra £1600 to appeal a decision which can be necessary in the instance that the trial judge makes an error of law.

A report by the TUC, ‘What Price Justice?’ shows that since the introduction of fees there has been a 79 per cent fall in overall claims taken to employment tribunals, with women and low-paid workers the worst affected. The full report can be accessed here.

TUC General Secretary Frances O’Grady said that “Employment tribunal fees have been a huge victory for Britain’s worst bosses. By charging up-front fees for harassment and abuse claims the government has made it easier for bad employers to get away with the most appalling behaviour. Tribunal fees are part of a wider campaign to get rid of workers’ basic rights. The consequence has been to price low-paid and vulnerable people out of justice.”

Furthermore, new research from the Citizens Advice Bureau has revealed that seven out of ten potentially successful cases that could have gone before tribunals are not going ahead. These findings were based on an analysis of 182 employment cases brought to Citizens Advice in June and July 2014. It was found that in more than half the cases, fees or costs were the main reason why people chose not to pursue their claim. Unfair dismissal, withholding of wages and holiday pay accounted for the majority of claims.

Gillian Guy, Chief Executive of Citizens Advice, stated that “Employers are getting away with unlawful sackings and withholding wages. People with strong employment claims are immediately defeated by high costs. The cost of a case can sometimes be more than the award achieved, and people can’t afford to fight on principle anymore.”

In defence of the fees, the government has promised to review the impact of the introduction of fees; however, no date for the review to go ahead has yet been announced. The Justice Minister, Shailesh Vara, stated that “It is not fair for the taxpayer to foot the £74m bill for people to escalate workplace disputes to a tribunal. It is not unreasonable to expect people who can afford to do so to make a contribution. For those who cannot afford to pay, full-fee waivers are available.”

Researchers at the universities of Bristol and Strathclyde have studied the consequences of the introduction of fees and found that the fee remission system is complex and claimants have found it hard to establish whether they are eligible. The researchers concluded that the fees have ‘severely limited access to justice for workers’.

With this in mind, however, it may not be all doom and gloom for employees and good news may be on the horizon. This week Shadow Business Secretary Chuka Umunna told the TUC Congress that “If we are elected, the next Labour government will abolish the current system, reform the employment tribunals and put in place a new system which ensures all workers have proper access to justice.” He also stated that “The current employment tribunal system is unfair, unsustainable and has resulted in prohibitive costs. Affordability should not be a barrier to workplace justice, but it would be a mistake to simply return to the system of the past, where tribunals were so slow that meaningful justice was not available.”

It would seem that Labour not only plan to scrap the fees, but to scrap the Employment Tribunal as we know it all together. It is true that the system before the fees were introduced was slow with large backlogs and a lengthy period between application and final judgment. Justice is, of course, supposed to be expeditious. Therefore, perhaps a re-vamp of the whole system is needed, although what it may ultimately comes down to is resource. Under the old system the time delays were caused by the volume of cases; something that has clearly improved with the large drop in cases. It would follow that if the fees were simply removed this would result in a large number of cases being brought again and thus increasing the time taken to dispose of cases. Consideration must be given to whether a new system, as Labour propose, is the best method, or should the fees just be removed and more resource invested into disposing of cases expeditiously? 

Even if Labour fail to become elected in next year’s election, their plans do seem to have sparked a debate, putting the area into a much needed spotlight. The Institute of Directors called fees a ‘sensible way to weed out weak or vexatious claims’. James Sproule, the institute’s director of policy, added “Before the charges were introduced, fewer than one in ten tribunal cases against IoD members were won by the claimant, wasting large amounts of money and management time for businesses. Labour must be very careful that they do not once again make the system a one-way bet, where the entire burden is on the employer.”

Matthew Hancock, Conservative Minister for Business, Enterprise and Employment also tweeted that “with proposals like these from Chuka Umunna there’s no wonder every Labour Government leaves office with unemployment higher”.

It is clear that from a social justice perspective the fees are bad news. While it is understandable that employers want a system which discourages unmeritorious claims, such a system should not prevent claims with merit from proceeding, as the current research shows is clearly the case at present.

In the context of criminal law, Sir William Blackstone famously stated that it is better to let ten guilty men walk free than to risk one innocent man being convicted. Is it therefore not better to let ten claimants bring cases which lose in order to allow one claimant to bring a case which will win? Many will argue that this is inefficient and too burdensome for employers. Others will argue that this is a small price to pay for justice. What do you think?

 

10/09/2014

Dale Timson

LLB (Honours) Student & Aspiring Barrister

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