Government review of the introduction of fees in the Employment Tribunals "highlights some matters of concern that cannot be ignored” but fees are here to stay

30 March 2017

Jonathan Goldsworthy

In 2013, fees were introduced for proceedings in the Employment Tribunal and Employment Appeals Tribunal with Type A claims (e.g. unpaid wages) costing £160, Type B claims (e.g. unfair dismissal) costing £250 and a subsequent fee for a hearing (£230 and £950 respectively). In the two years following the introduction of fees, it is estimated that the total number of single claims fell by 68% - a significantly larger decrease than expected.

A review was initially scheduled for the summer of 2014; however, it was not until the end of January 2017 that the Government published its "Review of the introduction of fees in the employment tribunals: consultation on proposals for reform".

The purpose of the review was to undertake a thorough assessment of the success of the introduction of fees against the Government's original objectives namely: to transfer a proportion of the costs of the tribunal service to the end-users; to encourage people to use alternative services to help resolve disputes; and to protect access to justice.

Notwithstanding that the review has found that there has been a "sharp, significant and sustained" decrease in Employment Tribunal claims and that the fee regime has discouraged people from bringing claims to a larger scale than expected, the Government has still concluded that there is no evidence that people have actually been prevented from bringing claims. Indeed, in broad terms, the Government has concluded that the introduction of fees has met its objectives as users are now contributing approximately £9 million per year (in line with Government projections) to the Employment Tribunal service's running costs and people have used alternative dispute resolution services [with 48% of people settling their disputes before litigation] with many still issuing proceedings where settlement has not proved possible. It is, perhaps, unsurprising that so many disputes have been resolved through alternative dispute resolution when it is now compulsory to go through the ACAS early conciliation process before filing an Employment Tribunal claim.

The Government does acknowledge that there are still a group of people who were unable to resolve their disputes through conciliation, but did not issue proceedings because they said they could not afford to pay the associated costs. The Government has, therefore, decided to extend access to the support available under the Help with Fees scheme, which offers assistance to those individuals who would not be able to afford to pay the fees. However, to qualify under the scheme, a claimant must have less than £3,000 of disposable capital and be also earning less than £1,250 before tax per month (this has increased from £1,085). The Government is satisfied that accessibility to and awareness of the scheme has been improved with increased guidance and a simplified [online] application procedure; however it will be interesting to see how many people actually qualify for and use the scheme in the next year.

The Government's view is not shared by all and, indeed, the trade union, UNISON, is in the process of challenging the Employment Tribunal fee regime in the Supreme Court. UNISON's position is that Employment Tribunal fees are preventing a significant number of mistreated workers -particularly those on low incomes - from obtaining justice and are discriminatory. The two-day hearing on 27 and 28 March 2017 marks the culmination of a lengthy legal campaign which has already seen UNISON lose its case in the High Court and Court of Appeal.

As such, whilst it is very much a case of "watch this space", for the time being, the Employment Tribunal fee regime is here to stay.