Employment Tribunal Fees: Rights but no remedy
On 17 November I gave evidence to the Justice Select Committee inquiry about the impact of Employment Tribunal fees on Citizens Advice clients based on the experiences of local Citizens Advice, the ‘fairer fees’ report published by Citizens Advice in January and our written submission to the Committee in September.
The Employment Tribunal (ET) system is a public service which has a social benefit for all and which all members of society should have access to. Historically, the ETs (known as industrial tribunals until 1998) were designed as courts to decide disputes between employers and employees, without lawyers and without the formality of the civil courts. While the ET system had undoubtedly become more adversarial and legalistic, it was designed to be used by individuals rather than lawyers. The fact that it was free and accessible had a social benefit because employers knew that rights could be enforced and were incentivised to follow good practice to the benefit of all workers.
In July 2013 fees were introduced to the ET system for the first time. Where a claim reaches hearing stage, fees are £1,200 for unfair dismissal and discrimination claims or £390 for all other claims.
A comparison of the Ministry of Justice’s own statistics shows that since the introduction of fees the number of single ET claims has fallen by 69% and the number of discrimination claims by over 80% (as compared to pre fees figures).
This has been attributed by some to the fact that weak or vexatious claims (meaning that it has no reasonable prospect of success; it has been brought simply to harass, inconvenience or cause distress to the opposing party or it is being conducted in an unreasonable way) are no longer being brought. This is simply not true. The success rate at ET has not varied as you would expect had fees discouraged weak or vexatious claims.
Instead, the fees are reducing ALL claims, and the particularly dramatic fall in discrimination claims (for which there is a £1,200 fee) shows that the greater the cost, the less likely people are to bring claims forward.
What does our evidence show?
Last year Citizens Advice dealt with 380,000 employment issues and a further 7.2 million unique visitors sought help from our public employment pages at citizensadvice.org.uk showing that there are still large numbers of workplace issues being experienced by our clients.
- Our research showed that 4 out of 5 clients felt that the current levels of fees would deter them from bringing ET claims
- 47% of potential type B claimants—those bringing unfair dismissal or discrimination claims—said that they would have to save all of their discretionary income for six months in order to be able to afford a type B claim.
The evidence suggests that the reduction in ET claims being brought is primarily because of the introduction of fees rather than other factors.
Isn’t there help with fees for low earners?
Help with fees is available but there is a lack of awareness of the system and the eligibility requirements are difficult to understand. Our research showed that 51% of respondents who thought that they were not entitled to any help with fees were, in fact, entitled to help with all or part of them.
The introduction of fees is a barrier to access to justice for workers whose employment disputes cannot be resolved outside the courts
I told the Committee that, in Citizens Advice’s experience, clients are vulnerable and have a number of problems accessing justice, including low income, not having English as a first language and being scared of the system. They are dealing with an employer base that often does not pay its staff or give them access to their basic workplace rights. Clients must overcome significant barriers in order just to start out. Fees for bringing a claim must be proportionate to the outcomes sought. For example, a claim for £200 in unpaid wages costs £390 and we know that only 49% of successful claimants are paid their compensation in full so bringing an ET claim in these circumstances carries a disproportionate risk for our clients.
The current system needs to be overhauled
Citizens Advice has consistently argued that the current fees regime needs to be overhauled. We recommended to the Justice Select Committee that:
- Fees should be reduced to make them a low cost and affordable way of resolving employment disputes where conciliation has failed. Any costs for users need to be set at a level that does not exclude the most vulnerable members of society from the ET process.
- If fees are to remain at current levels for complex cases, they should be lower for low value, simple claims such as non-payment of wages and other statutory amounts
- Alternatively, there should be non-tribunal procedures for resolving low value or simple claims
- Regardless, fees should be waived in cases where employees are required to obtain a tribunal judgment against employers who are not formally insolvent in order to obtain a redundancy payment from the Insolvency Service, or the law should allow for the reimbursement of those fees by the Insolvency Service; or the requirement to obtain a tribunal judgment should be removed in these cases.
Emma Wilkinson is the Senior Employment Expert with the Expert Advice Team. Follow her @emmawilksCAB