Employment tribunals - Commons Justice Committee report shows concerns over current fee system

Thrings solicitor Andrew Strong comments:

The House of Commons Justice Committee has published its long-awaited report into courts and tribunals fees. This report, which contains a detailed analysis of the impact of the introduction of fees in the employment tribunals in July 2013, will make for uncomfortable reading for the Government. Particular criticism is reserved for the Ministry of Justice, whose own post-implementation review of employment tribunal fees remains to be published, over a year since it was launched.

In a balanced assessment, the Justice Committee made the following key observations on the principle of charging litigants to access the employment tribunals and on the practical impact such fees have had:

  • There is nothing objectionable in principle about requiring litigants to pay a contribution towards the tribunals' running costs in return for the service they are accessing; what is more of a concern is to ensure that the contribution is set at the correct level in order to maintain access to justice;

  • Ascertaining the correct level of fees requires a consideration of the effectiveness of fee remission (whose processes the Committee recognised had recently been simplified), the "inequality of arms" (comparing the respective resources of both claimant and respondent) and the availability of any alternative routes to justice;

  • Whilst a core objective of the introduction of fees, and subsequently of compulsory Early Conciliation via ACAS, was to encourage parties to settle their disputes at an earlier stage (i.e. before proceeding to litigation), in reality the opposite had proved the case – employers tend to call potential claimants' bluff by avoiding engaging in settlement negotiations (whether via ACAS or informally) until there is clarity as to whether the claimant can and will pay the next fee;

  • To the extent that a further aim of introducing fees was (correctly) to root out weak and vexatious claims at the outset, the effect of fees has been that roughly the same level of potentially successful claimants have been deterred from issuing as potentially unsuccessful claimants.

On the whole, the Committee concluded that, "the regime of employment tribunal fees has had a significant adverse impact on access to justice for meritorious claims." For the Committee, access to justice outweighs the aim, albeit understandable and well-intentioned, of recovering the costs to the State of running the Tribunal Service.

The Committee’s report sets out a number of recommendations to overhaul (but not remove) the existing fees system, namely that:

  • The level of fees should be reduced;

  • The current differential in fees between "Type A" and "Type B" claims should be replaced, with either:

    • A single fee;

    • A three-, rather than two-, tiered structure; or

    • A fee set by reference to the damages claimed;

  • An increase be made to the caps in disposable capital and monthly income thresholds for fee remission, thereby rendering such remission easier to come by; and

  • Special consideration should be given to women alleging pregnancy or maternity discrimination, such as a review of the three-month limitation period for issuing a claim.

The publication of this report will come as an embarrassment for the Government, not only in the criticism of the Ministry of Justice for the delay in publishing the findings of its own review but also, and more importantly, in the criticism of the current tribunal fee system (introduced by Conservative ministers during the coalition government), in particular its negative impact on access to justice.

However, with the media and the public's attention fully focussed at present on this Thursday's EU Referendum, the Justice Committee's report and criticisms are unlikely to garner the type of interest they would have otherwise expected.

Even three years after their introduction, the question of fees in the employment tribunals remains controversial and divisive. As we have reported previously, the appeal in Unison's judicial review of fees is due to be heard by the Supreme Court, whilst fees are set to be abolished in Scotland.

Whilst the future direction of the current fees arrangements is therefore still up for discussion, it remains to be seen what action, if any, the Government will take in response to the Justice Committee’s report and how this will feed into the Ministry of Justice's own review. With a significant amount of political capital having been spent on introducing the fees during the last parliament, our view is that barring judicial intervention by the Supreme Court, wholesale reform of the current system is unlikely.

We will in any event continue to monitor developments and write again to provide further updates as the picture becomes clearer.

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