Lower tribunal fees mean easier (more affordable) access to tribunals for unhappy employees. And following a House of Commons Justice Committee report released this week, it seems possible that employment tribunal fees will be reduced. If that goes ahead, we can be almost certain that that would increase the number of employment tribunal claims brought against employers. This means that the recent downward trend in the number of claims brought by employees against their employers could be about to go into reverse.
Until a few years ago, it was free for an employee to bring a claim at the employment tribunal, e.g. for unfair dismissal, discrimination or unpaid wages. Then, in July 2013, the Government introduced fees for bringing claims. The fees vary depending on the type of claim: for starting the claim (also called ‘issuing’ it), it’s a fee of £160 where the claim is about unpaid wages, redundancy or an alleged breach of contract by the employer. The fee is £250 for claims about unfair dismissal, equal pay, discrimination or whistleblowing. If the disagreement gets as far as a tribunal hearing, the fees are £230 for the first category of claims just mentioned, or £950 for the second group.
The charging of fees at these levels brings the employment tribunal regime closer to other fees payable by claimants in the civil law courts. For example, a claim for a sum of money owed to the claimant can require a fee between £25 and £10,000, depending on the amount of money being claimed. To start (or issue) a claim for a disagreement concerning something other than money, fees range between £280 and £480. There is a listing of fees that claimants can check when starting to pursue their case. You can find the list here. If the disagreement reaches a hearing in the civil courts, fees again span a range depending on the type and value of the claim being made.
Prior to the charging of these fees, the taxpayer paid for the cost of the tribunal system. However this was subsequently recognised as being an inappropriate mechanism of financing the tribunal system, not least since most taxpayers never brought any of these types of claims. The absence of fees was also blamed for spurious or inappropriate claims being made against good faith employers, since employee claimants had little to lose in starting these claims.
The introduction of tribunal fees was certainly controversial. There are plenty of people who consider that the cost of justice is something that society should bear collectively, and that the introduction of fees made it too difficult for unhappy workers to bring their employers to account. Trade unions were against the fees. Unison even brought a judicial review claim against their introduction, effectively asking the courts to consider the legitimacy of the Government’s decision to introduce them, in the hopes that the decision could be declared unlawful. The UK’s High Court and subsequently Court of Appeal both dismissed the claim, but the case is still ongoing and has been appealed by Unison again, this time before the UK’s Supreme Court who will have the final decision.
Politicians’ views have also varied widely. So in July 2015, the House of Commons Justice Committee began an inquiry into the impact of the fees. On 20 June 2016, the committee published its findings, which can be found in full here.
The Committee found that the introduction of fees at their current levels had reduced the number of employee claims by almost 70%. They observed that this “startling drop was not predicted by the Government”. Unfortunately, the Committee felt its findings were inadequate because the Government had not supplied them with all the necessary evidence. The Committee recognised that seeking to reduce vexatious claims was a reasonable objective for the Government. However, with the lack of evidence provided, the Committee could not give a firm conclusion as to whether that objective had been properly or effectively met.
It’s not surprising that the number of claims has reduced. The fundamental question is whether claimants with good claims have been deterred from issuing claims?
This is just a Committee report. It is not binding and neither does it place any obligation on the Government. It does have persuasive impact, however, and Committee reports do tend to be treated with respect and due consideration.
So…the system has not yet changed and fees are still the same. But it’s worth keeping a watchful eye on this space if you’re an employer; because the lay of the land may change in the future, making the prospect of paying to bring a claim a little more palatable for some employees. And whilst we wouldn’t anticipate the opening of any floodgates on tribunal claims statistics, employers should be ready for a reasonably foreseeable increase.
The best way to make sure that you don’t contribute to those statistics is to ensure your employment policies are robust and up to date and the contracts and arrangements on which you engage your workers, train them and manage them, all properly, fairly and lawfully protect your business interests. If you're a registered member of our elXtr online DIY law platform, you can also access our suite of additional self-help materials.
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In its long-awaited report into the effects of fees on the court and tribunal system, the House of Commons Justice Committee urges the government to ‘substantially reduce’ the overall quantum of fees charged for bringing cases to employment tribunal.