Workers priced out of justice
As numerous organisations warned, the introduction of employment tribunal fees has caused a colossal fall in the number of claims being pursued. Despite this, the government insists the regime works and is here to stay. Catherine Baksi reports.
As the Supreme Court decides whether the introduction of employment tribunal (ET) fees is unlawful, the Ministry of Justice (MoJ) maintains that they have not prevented people from taking claims or harmed access to justice. On 29 July 2013, the government introduced a historic change to the rights of workers who claimed to have been wronged by their employers, requiring them to pay fees of up to £1,200 to take claims to the formerly free ET. The government claimed the move was designed to reduce costs and encourage alternative ways of resolving workplace disputes. Three-and-a-half years later, the MoJ published its long-awaited review, laying bare the scale of the fee regime’s impact.
Announced in June 2015, but not published until this year, the Review of the introduction of fees in the employment tribunals: consultation on proposals for reform (Cm 9373, January 2017) confirms a dramatic 70 per cent drop in cases – a proportion that has surprised even the MoJ, which describes the ‘troubling’ and ‘stark’ fall as ‘significant and much greater than originally estimated’. The figures show that since the introduction of fees, the number of single claims fell from 53,844 in the year before the fees were introduced to 18,480 in the year after – a 66 per cent drop – and that multiple claims fell from 5,847 to 1,740 – 70 per cent down – in the same period.
The fee regime comprises two tiers. Type A fees, for simpler and more straightforward disputes (eg, for those seeking a written contract of employment, payment of unpaid wages and applications under the Working Time Directive) are £160 to lodge the claim and £230 for a hearing. Type B fees, which apply to more complex and time-consuming cases such as unfair dismissal, discrimination and equal pay, were set at £250 to lodge a claim and £950 for a hearing.
Mission accomplished?
In the review, the MoJ states that the three objectives in introducing the change were: to transfer a proportion of the costs of the ETs to users (where they can afford to pay); to encourage people to use alternative services to help resolve their disputes; and to protect access to justice.
Having considered the evidence, the MoJ has concluded that those objectives have ‘broadly been met’. The review says those who use the tribunal are contributing around £9m per annum in fees, in line with MoJ estimates. While the ministry accepts that there was a ‘sharp, significant and sustained fall’ in claims following the introduction of fees, it argues that that was a ‘positive outcome’ because it meant more people had used the Acas conciliation service to resolve their disputes.
The conciliation service became a mandatory first step for claimants in May 2014. In the first year, the MoJ says, there were over 80,000 notifications to Acas, which increased to more than 92,000 in 2015/16. While 48 per cent of people who referred disputes to Acas did not need to go to the tribunal, 34 per cent went on to issue proceedings.
An Acas evaluation showed that 19 per cent of respondents (equating to around 16,000 people annually) who were not able to resolve their dispute through conciliation did not go on to issue proceedings. Three per cent of the respondents (which the MoJ estimates scales up to between 3,000 and 8,000 people across the board) said that was because they could not afford to pay. But the MoJ does ‘not believe … that this necessarily means that those people could not realistically afford to pay the fee’. Rather, it suggests, it may mean ‘that paying the fee might involve having to reduce other areas of non-essential spending’, or that respondents were unaware of the Help with Fees scheme or the lord chancellor’s exceptional power to remit fees.
Practitioner and employee groups generally were opposed to the notion of fees per se, while others highlighted concerns about their consequences. The Council of Employment Judges, and the presidents of the ETs in England and Wales and in Scotland voiced concern that there had been a greater fall in lower-value claims, such as unpaid wages and unpaid annual leave, and claims that did not seek a financial remedy. In such cases, they argued that the fees were disproportionate and made it uneconomic for people to take proceedings. The Justice Committee (Courts and tribunals fees. Second report of session 2016–17, HC 167, 20 June 2016) and the Women and Equalities Committee (Pregnancy and maternity discrimination. First report of session 2016–17, HC 90, 31 August 2016), meanwhile, argued that the fees had had a particularly adverse impact on pregnancy and maternity discrimination claims.
Despite these and other negative effects, the review states: ‘While there is clear evidence that ET fees have discouraged people from bringing claims, there is no conclusive evidence that they have been prevented from doing so … We have therefore broadly concluded that under this reformed system for dealing with employment-related disputes, there continues to be effective access to justice through a combination of conciliation and the option to bring proceedings to the ETs if conciliation does not work, supported by Help with Fees and underpinned by the lord chancellor’s exceptional power to remit fees’.
Inadequate repairs for a broken system
The MoJ does accept that the fees have worked to discourage people from bringing claims, and proposes minor adjustments to the scheme to alleviate this. These include extending access to the support available under the Help with Fees scheme and increasing the gross monthly income threshold for fee remission from £1,085 to £1,250 – broadly the level of earnings for a single person working full time on the national living wage – with additional allowances for people living as couples and for those with children.
Echoing the views of all practitioner groups, Gavin Mansfield QC, chair of the Employment Law Bar Association, which opposes the notion of fees, says the current proposals amount to ‘nothing more than tinkering around the edges and won’t restore access to justice. The massive reduction in the number of claims tells its own story – the fees have had a huge impact on access to justice’.
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Bob Neill MP
Bob Neill MP, Conservative chair of the cross-party Justice Committee, welcomes the proposals to the extent that they will ‘help some people to get access to justice’, but says: ‘It’s likely to be a pretty limited solution and has the smack of a sticking plaster about it.’
He questions how much the policy was driven by the MoJ rather than the Treasury in the first place and asks: ‘Is it really a front for a desire on the part of policymakers to reduce the number of claims going to the tribunal?’ If so, he suggests the government should be upfront about it and change the law, for example, by making the grounds for taking a claim tougher.
Neill accuses the ministry of being ‘disingenuous’ in its assertion that the conciliation scheme is adequate to ensure claimants are afforded proper access to justice. ‘No one can seriously think that a 70 per cent drop in claims means people are transferring to other forms of dispute resolution,’ he states.
Mansfield agrees, adding: ‘There is a lot to be said for alternative dispute resolution and conciliation, but often it does not provide an effective means of redress because you have to compromise rather than seek to demonstrate your rights in a public forum.’ Furthermore, he says, it ignores the normative effect of employment litigation to set an acceptable standard that employers should meet: ‘If you push everyone to pursue resolution through conciliation, you don’t get the cases that set the standards.’
The tribunal system was introduced as a better alternative to industrial action as a means of resolving workplace disputes, says Max Winthrop, a member of the Law Society’s employment law committee and partner at Newcastle firm Short Richardson & Forth. It was, before the fees came in, an ‘effective way to get access to justice and kept employers on their toes’. He questions the rationale for the introduction of fees and why the cost should initially fall entirely on the worker, cautioning that the concept appears to espouse that ‘justice is a purchasable commodity that can be bought by those who can afford it’.
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Max Winthrop
The government keeps talking about ordinary working people – please can we see the ordinary working people given access to justice?
‘It amounts to the state washing its hands of the responsibility to provide a system of dispute resolution for its citizens,’ Winthrop says. ‘The government keeps talking about ordinary working people – please can we see the ordinary working people given access to justice?’ He adds that a fairer system might be for the employer to pay part of the fee if it seeks to defend an action.
If the government had hoped that the fees would deter litigants with unmeritorious claims, that does not appear to have happened. The success rates have remained the same, observes Mansfield, pointing out that there is a certain brand of litigant who will be undeterred by the imposition of fees. Winthrop, meanwhile, suggests that another reason why some claims with little chance of success are still being taken is due to the removal of funding from Law Centres that would in the past have offered employment law advice.
Women bearing the brunt
The impact on claims relating to pregnancy and maternity rights has given rise to particular concern, although the government is adamant that they have not dropped in a greater proportion to others, and so has rejected pleas for them to be taken outside the fee scheme. But Rosalind Bragg, director of Maternity Action, insists they are a special case because of the particular difficulties of those affected and the financially precarious position women can find themselves in when they become mothers. ‘The fees of up to £1,200 make justice unaffordable for the vast amount of women,’ she says, and they were introduced against a background of rising discrimination in this area.
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Rosalind Bragg
‘As fewer women are taking cases to the tribunal, there is a disincentive for even good employers to engage in good practice,’ warns Bragg. ‘We are getting calls from women in small and large companies, in all sectors, some who work in companies that have been given awards for good practice and family-friendly working’.
Bragg adds: ‘It is disappointing that we’ve seen no indication that ET fees will be removed or substantially reduced. Minor changes to the remission system will not address the problem of access to justice.’
Keeping the issue live
However, the government may yet be forced to go back to the drawing board and, pending the outcome of the challenge to the fees by Unison, which the Supreme Court heard last month, it may have to repay two years’ worth of fees. The union’s general secretary, Dave Prentis, says: ‘Unison is confident our hearing at the Supreme Court will result in a fair judgment employees in the UK deserve.’ He urges ministers to scrap the fees before anyone else ‘is forced to go without legal recourse having been exploited or discriminated against’.
Whatever the outcome, this is not an issue that is going to slip quietly off the radar. Neill confirms that the Justice Committee will be revisiting it and preparing a follow-up report.
Unison challenge: a timeline
29 July 2013: Unison seeks permission in the High Court to bring judicial review proceedings.
October/November 2013: Unison’s first claim is heard in the High Court.
7 February 2014: Unison’s challenge is unsuccessful ([2014] EWHC 218 (Admin)). The High Court states that the claim brought was premature and that new proceedings should be lodged, if and when further evidence is available.
May 2014: Unison is granted permission to appeal to the Court of Appeal.
September 2014: Court of Appeal claim is stayed to allow a second High Court challenge.
October 2014: Unison brings its second judicial review challenge against the Lord Chancellor.
17 December 2014: Unison’s second challenge is unsuccessful despite the ‘striking’ and ‘very dramatic’ reduction in claims ([2014] EWHC 4198 (Admin)).
June 2015: Court of Appeal hears Unison’s appeals in relation to both High Court claims.
26 August 2015: Unison is unsuccessful at the Court of Appeal ([2015] EWCA Civ 935) and applies for permission to appeal to the Supreme Court.
26 February 2016: Supreme Court grants Unison permission to appeal.
27/28 March 2017: Supreme Court hears Unison’s appeal.

About the author(s)

Description: Catherine Baksi - author
Catherine Baksi is a freelance legal affairs journalist.