Employment Tribunal fees: A “significant adverse impact on access to justice” says the Justice Committee

Written on 21 Jun 2016

The outcome of the government’s long-awaited review into the impact of the introduction of fees in the Employment Tribunal (ET), commenced in June 2015, and still remains outstanding.

However, alongside the government’s review, the House of Commons Justice Committee (“the Justice Committee”) have been hearing evidence about fees across a spectrum of Courts and tribunals. Their report is here and it makes interesting reading.  Highly critical of the level of ET fees, it refers to them as having led to an undisputed and precipitate drop in claims – which, in turn, has had a “significant adverse impact on access to justice“.

There has also been an “unacceptable” delay in the government concluding its review into their impact.

Latest statistics show decline in ET claims

The Justice Committee’s report comes in the context of a significant drop in ET claims. Although the precise drop in claims depends on how the figures are cut – the fact that there has been a drop is indisputable. Fees were introduced on 29 July 2013. The number of single claims brought declined by about 67% from October 2013 to June 2015 and show no sign of bouncing back. The latest statistics (9 June 2016) for the quarter from January to March 2016 show single claims down 1% on the same period in 2015.

Justice Committee finds fees rather than ACAS early conciliation are responsible for this decline

The Justice Committee has not sought to argue against the principle of charging litigants a court fee to use the ET service; it has no issue with this. The key matter for resolution in its view is what constitutes an acceptable amount to charge. The current regime has essentially got this wrong – and in doing so there has been a significant adverse impact on access to justice for meritorious claims.

This conclusion is reached despite government evidence that the reduction in claims is not entirely attributable to ET fees – the government pointing out that in the year up to April 2014, 83,000 cases have been dealt with through the ACAS early conciliation process, and so this was 83,000 potential claims that did not enter the ET system.

The Justice Committee however found this analysis “superficial”; those cases cannot simply be assumed to represent displaced claims, (i.e. cases settled satisfactorily), instead of being taken to an ET.

On the contrary, it found instead that “in many cases the existence of fees erects a disincentive for employers to resolve disputes at an early stage”. In other words, employers faced with the prospect of a claim will sometimes wait to see if a fee is paid rather than conciliate prior to this point.

Recommendations for reform

The Justice Committee recommends that the ET fee rates should be substantially reduced. It calls for the abolition of the current distinction between Type A and Type B claims, (which bring with them set specific fee levels), and for them to be replaced. Acceptable alternatives suggested are a single fee; a three tier fee structure, as suggested by the Senior President of Tribunals; or a level of fee set as a proportion of the amount claimed, (with the fee waived if the amount claimed is below a determined level). It also calls for the fee remission system to be overhauled with disposable capital and monthly income thresholds for fee remission increased; and no more than one fee remission application required, covering both the issue fee and the prospective hearing fee.

Call for special rules for women alleging maternity or pregnancy discrimination

The Justice Committee also recommends that further special consideration should be given to the position of women alleging maternity or pregnancy discrimination; as a minimum there should be a review of the three month time limit for bringing a claim. The specific issue of maternity and pregnancy discrimination in the workplace has been the subject of a recent review by the Equality and Human Rights Commission, placing further pressure on the government to take action in this respect. The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara) indicated back in April (here) that the government’s review of ET fees would “consider, so far as is possible, the impact the fees have had on those with protected characteristics
who use employment tribunals, as well as the types of case they bring.

Criticism directed at the government’s tardiness

The Justice Committee had hoped to factor the government’s review into its findings, but having waited for the outcome of the review for some time, felt it “could wait no longer”. The Justice Committee stated that it had “not appreciated being strung along” by the government in this way. In a particularly striking phrase, it states:

“…there can be no compelling reason to withhold from public view the factual information about the impact of the introduction of employment tribunal fees which have been collated by the review.

It goes on:

“…there is a troubling contrast between the speed with which the Government has brought forward successive proposals for higher fees, and its tardiness in completing an assessment of the impact of the most controversial change it has made“.

What next?

The Justice Committee’s report significantly raises the stakes for the government to resolve, once and for all, the thorny issue of ET fees and their impact on access to justice for workers and employees. Noting that the cost implications of meeting its recommendations are no justification for inaction, it concludes:

… an increase in the number of legitimate claims would in itself bring in additional fee income, and secondly, we stress again that if there were to be a binary choice between income from fees and preservation of access to justice, the latter must prevail as a matter of broader public policy“. (our emphasis)

The government has previously indicated that they would take the Justice Committee report “into account” when reporting back on their own review – the extent to which they will be influenced by the findings, amidst the criticisms levelled at the government, remains to be seen. And with all eyes directed at the European referendum on 23 June, we may still be waiting for the government response for some time yet.