The House of Commons Justice Committee recently carried out an inquiry regarding, among other things, fees in the Employment Tribunal (ET). Part of this inquiry was to consider the effect the introduction of ET fees has had on access to justice and how it has affected the volume and quality of cases brought. They have now published their report.
Employment Tribunal fees were introduced by the UK Government in July 2013. They are currently divided into Type A and Type B, with Type B claims being more complex and therefore attracting a higher fee. Claimants, unless they qualify for fee remission, must pay an issue fee in order to raise the claim and a further hearing fee if the matter is to proceed to a hearing. At the moment, these combined fees result in a cost to Claimants of £390 for Type A claims and £1200 for Type B claims.
The Government stated it would publish a review on the impact of employment tribunal fees by the end of 2015 and the Committee is critical in their report of the failure to do so. The Committee’s own findings suggest that fees have had a significant adverse impact on access to justice.
The Committee found that the introduction of fees has led to an “undisputed and precipitate drop” in the number of ET claims being raised, with a decline of around 70%. Some participants had suggested that many claims were being resolved by way of Early Conciliation, but the Committee felt that this was too simplistic an analysis. There was considerable evidence that instead of encouraging early settlement through ACAS Early Conciliation or otherwise, fees are having the opposite effect. Many of those who gave evidence noted that there is no incentive for employers to settle in cases where it is believed the Claimant may struggle to pay the fee.
The Committee felt that the timing and scale of the reduction in claims indicated that the majority of the decline was attributable to fees. Its conclusions are that the fees have had an unacceptable impact on access to justice for those with meritorious claims.
One predicted effect of the introduction of fees was the deterrence of frivolous and vexatious claims. The Committee considered that this was a reasonable objective, but it was too soon to say if it was being achieved. They found that there was little evidence before them as to how many claims are actually vexatious but did find that, with the decline in the number of claims, there has been no corresponding increase in the number of claims in which the Claimant is successful, as might be expected if only meritorious claims were being brought.
The Committee noted statistics which were produced by Unison and the TUC, which showed that there had been a significant reduction in many types of claim:
- a decline of 72% in the number of unfair dismissal claims raised;
- a 68% decline in sex discrimination claims. This often includes claims based on pregnancy and maternity, and there was also evidence that specific claims for detriment or dismissal due to pregnancy or maternity were down 40%, despite evidence that 11% of mothers faced discrimination in some form. The Committee noted that this suggests the fees may be having a disproportionate impact on pregnant women.
The Committee also noted a disproportionate effect on ‘low value’ claims, such as those for holiday pay or unpaid wages. Often, the amount sought in these claims is outweighed by the fees. The Committee noted the evidence of the Council of Employment Judges, who stated that the amount of such claims, while low, is often of significance to the Claimant and these claims often succeeded when brought. This suggests that the introduction of fees is impacting the ability of workers to enforce such rights.
In concluding that fees have had an adverse effect on access to justice, the Committee made some recommendations, including:
- the level of fees charged for bringing cases to employment tribunals should be substantially reduced;
- the type A/type B distinction for fees should be replaced, perhaps by a single fee; by a three-tier fee structure; or by a level of fee proportionate to the amount claimed, with no fee if the amount claimed is below a set level;
- fee remission thresholds should be increased, and no more than one fee remission application should be required, covering both the issue fee and the prospective hearing fee (rather than the current system where remission for each requires to be applied for separately)
- special consideration should be given to the position of women alleging maternity or pregnancy discrimination, for whom, at the least, the time limit of three months for bringing a claim should be reviewed.
The Committee noted that it could not definitively conclude that these changes would address the issues identified and therefore should also be subject to review. While its recommendations would have cost implications, it noted that reduced fees and greater access to justice could result in a rise in legitimate claims, which would provide more income in the form of fees. They also concluded that if a choice was to be faced between income from fees and access to justice, then access to justice must prevail as a matter of public policy.
These findings reflect the statistics which have been produced so far. While there have been other factors which have been argued to contribute to the reduction in the number of claims, the Committee acknowledged that the sharp decline highly suggests that fees are the key reason.
These findings may support Unison’s challenge to ET fees which has so far been unsuccessful , but is ongoing and due to be heard by the Supreme Court later this year. In the Court of Appeal, the judge noted that:
"The decline in the number of claims in the Tribunals following the introduction of the Fees Order is sufficiently startling to merit a very full and careful analysis of its causes; and if there are good grounds for concluding that part of it is accounted for by claimants being realistically unable to afford to bring proceedings, the level of fees and/or the remission criteria will need to be revisited."
It will be interesting to see if these findings can provide support for this position. It also remains to be seen whether the government will implement any of the recommendations suggested by the Committee. Additionally, following consultation on the potential devolution of Scottish employment tribunals to the Scottish Government, it remains to be seen what approach the Scottish Government will take should this occur and whether they will follow through on their intention to abolish fees.
