The employment tribunal fees review is a let-down for employees currently priced out of access to justice
It was never going to turn the clock back to what Legal Action believes were better times, but the government’s long-awaited review of employment tribunal fees is a crushing disappointment to those of us who want greater access to justice for people with work-related legal problems.
After July 2013, when the fees were introduced, the number of cases brought before employment tribunals plummeted by just under 70 per cent. Despite this, in the review document (Review of the introduction of fees in the employment tribunals: consultation on proposals for reform
, Cm 9373) published at the end of January (see page 4 of this issue), the government does not accept that the fees have had a chilling effect on access to justice. The review argues that people are taking their problems elsewhere rather than bringing their cases to a tribunal.
Claimants now have to pay a £250 fee to lodge an unfair dismissal or discrimination case. A further fee of £950 is charged if the case goes to a hearing. The review proposes that the threshold for fee remission is raised to around the national living wage. In cash terms, for single people with no children this means they will not have to pay fees if they are earning less than £1,250 per month, an increase of only £165 on the current levels.
At a total cost in fees of £1,200, an unfair dismissal or discrimination claim is, Legal Action would argue, well beyond the means of many people earning above the minimum wage. A single person on average pay, without a student loan, will be taking home under £1,800 a month, of which at least a third will be going on housing costs. The fees for a tribunal case would therefore burn through the equivalent of at least one month’s living costs after paying for rent or a mortgage. The prime minister has made much of her intention to help JAM (just about managing) families, but this concern does not seem to extend to employees unable to enforce their rights at work.
Many employees are settling cases for less than they are worth.
The review argues that the fees have encouraged employees to seek to resolve their differences via Acas. Last year (2015/16), 92,000 cases were referred to the service, an increase of 9,000 on the previous year. At face value, this looks like an encouraging statistic, but it is well under the 195,570 claims to employment tribunals that were made in the year before the fees were introduced. Also, only 15 per cent of the claims made last year were settled either privately or on what is known as a COT3 settlement form, a legally binding agreement made via Acas. Over 60 per cent of claims did not make it to a tribunal or settle via Acas or privately.
Employment lawyers and advisers who have spoken to Legal Action fear that without independent legal advice, many employees, even if they use Acas, are settling cases for less than they are worth. Many others withdraw their claims as the employer will not bother to negotiate before a hearing date is set knowing that the hearing fee is likely to discourage the employee from pursuing the matter.
Legal Action ’s main issue with the government’s analysis of the impact of tribunal fees is that it is based on the cases that get into the tribunal system rather than the many thousands more that don’t get that far as people are discouraged from bringing them. Pregnancy dismissal and breach of maternity rights cases provide a good example. The review rejects the House of Commons Justice and Women and Equalities Committees’ recommendation that special consideration should be given to pregnancy dismissal and maternity rights claims. It argues that there has not been a disproportionate decrease in such cases, but this ignores the evidence of widespread discrimination against women on grounds of pregnancy and maternity.
One welcome change suggested in the review is the concession on fees charged to former employees claiming payments from the National Insurance Fund. The most common type of claim in such cases is for redundancy and other payments owed by employers that are insolvent or have ceased trading. Legal Action argues that the government should consider widening this concession to include discrimination and pregnancy dismissal cases because of the seriousness of the injustice suffered by the employee. We would also argue that the means test for remission of fees should be substantially raised to at least include people on or below the average wage. This would be the only way of rebalancing a system that is, due to the imposition of fees, now so substantially weighted against employees.