Employment tribunal fees discourage claims

The introduction of employment tribunal fees has discouraged people from bringing claims, the Ministry of Justice has admitted after publishing its long-awaited review of the fees regime.

However, the government maintains there is no evidence fees have prevented claimants from bringing actions.The fees were introduced for proceedings in employment tribunals in July 2013, despite widespread criticism from the legal profession over fears workers would be denied access to justice.

With its publication of the review, the government says the fees regime has broadly met its objectives, with tribunals contributing around £9m a year in fee income. Over 80,000 notifications were made to ACAS in the first year of the new early conciliation service, rising to 92,000 in 2015/16, and the free mediation service was found to be effective in just under half of disputes referred to it.

However, the MoJ acknowledged that between 3,000 and 8,000 disputes not resolved through ACAS did not reach a tribunal because claimants said they could not afford to pay the fees. Figures show that since the introduction of fees, the number of single claims fell from 53,844 to 18,480 – a 66 per cent drop – and that multiple claims fell from 5,847 to 1,740 – a reduction of 70 per cent.

Justice minister Sir Oliver Heald QC said it was right that those who can afford to should contribute to the cost of the tribunals, but confirmed the MoJ will consult on proposals to extend support to those on low incomes through its ‘Help with fees’ scheme, which the minister admitted there is a ‘lack of awareness’ of. Heald added that the drop in claims was to be expected as it is ‘hardly surprising that charging for something that was previously free would reduce demand’.

‘There is no doubt that fees, alongside the introduction of the early conciliation service, have brought about a dramatic change in the way that people now seek to resolve workplace disputes,’ he said. ‘That is a positive outcome, and while it is clear that many people have chosen not to bring claims to the employment tribunals, there is nothing to suggest they have been prevented from doing so.

‘This does not mean that there is no room for improvement, and where we have identified issues, we have not been afraid to address them. In particular, the substantial fall in claims, and the evidence that some people have found fees off-putting, has persuaded us that some action is necessary.’

Under the proposals out for consultation, the gross monthly income threshold for a fee remission would be increased from £1,085 to £1,250: broadly the level of earnings for a single person working full time on the national living wage. The government also proposes maintaining the additional allowances for people living as couples and for those with children.

Responding to the review, Richard Burgon MP, Labour’s shadow justice secretary and former trade union lawyer at Thompsons Solicitors, said: ‘Whatever ministers might say the reality is that the employment tribunal fees which they introduced in 2013 were intended to weaken workers’ rights and safeguard unscrupulous bosses.

‘The Tories’ intransigence in relation to sticking with the employment tribunal fees is bad news for working people and bad news for employers who play by the rules. Labour’s policy is clear: a Labour government will abolish employment tribunal fees which have seen a fall of around 70 per cent in cases being brought.’

Also commenting on the news, Robert Bourns, the president of the Law Society and employment solicitor at TLT, said that despite the justice minister’s assertions to the contrary, the government’s own report suggests tens of thousands of people are ‘slipping through the cracks’.

‘The truth is employment tribunal fees have had a chilling effect on the number of people able or willing to bring a case against their employer,’ he said. ‘Particularly affected are claims in areas such as sexual discrimination and equal pay – and the reduction in tribunal cases is not offset by the increase in people using ACAS’ early conciliation service.

‘Solicitors working in this area also report that the reduced number of claims has altered the behaviour of employers and we will address this concern in our consultation response.’

Bourns added that access to justice was ‘a public good which should not be used to generate revenue’, or the reputation of England and Wales’ legal system would be damaged.

John van der Luit-Drummond is deputy editor of Solicitors Journal

john.vanderluit@solicitorsjournal.co.uk | @JvdLD