employment tribunal fees

Ever since the coalition government announced its proposals in 2012, employment tribunal fees have been a contentious issue.

The government will argue that the tax payer should not have to carry the cost of resolving workplace disputes and whilst this might reflect much public opinion, trade unions and some public bodies hold concern that individuals are being priced out of justice.

The fees were introduced in July 2013 and the existing two tier structure works as follows:

Tier Issue Fee Hearing Fee
Type A £160 £230
Type B £250 £950

Type A claims include breach of contract, unauthorised deductions and unpaid redundancy pay. Type B claims include the likes of unfair dismissal and discrimination.

The introduction of the fees had an instant and significant impact. October – December 2013 saw a 79% reduction in employment tribunals based on the same period in 2012. Looking at the total figures for 2013/14, we still see a 45% reduction in claims compared to the previous year.

Of course this does not mean that employee relations issues are disappearing from the workplace, it does though show that the number of employees submitting employment tribunal claims has reduced. The challenges of ensuring employees remain at work, productive and engaged remain as strong as ever; and so the need for sound HR practice continues regardless of the reduction in employment tribunals.

The arrangements that were introduced in July 2013 do incorporate the right to apply for remission however concern still exists that the fees are actually preventing claims from individuals who have been poorly treated yet cannot afford to raise a claim.

There has been a 70% drop in workers pursuing claims for non-payment of the national minimum wage and an 85% drop in claims for unpaid wages and holiday pay. Citizens Advice Bureau Chief executive Gillian Guy is one high profile figure calling on the government to review its policy on tribunal fees. “Employers are getting away with unlawful sackings and withholding wages. People with strong employment claims are immediately defeated by high costs and fees.”

The TUC has referred to the drop in cases as a “huge victory for Britain’s worst bosses” and claims that individuals are being “priced out of justice.” Meanwhile of course, in May this year Unison won the right to challenge the legality of the fees at the Court of Appeal. The appeal was heard on the 18th September. It was agreed that the appeal should be stayed while a new High Court appeal is brought. We now await the announcement of further details on this.

The coalition government has promised to review the impact of the introduction of the fees and in April a junior minister revealed that a reduction in the fees would be considered. There has however been no commitment as to when the review will take place though government will of course be waiting to hear when Unison’s appeal will be brought.

In addition to Unison’s appeal and the government’s promise of a review, the Labour party have now announced that they will abolish the existing system of Employment Tribunal fees if elected in 2015.  Speaking at the TUC conference on 7th September, shadow business secretary, Chuka Umunna described existing arrangements as “unfair and unsustainable” and committed to Labour reforming the employment tribunal system to ensure that “all workers have proper access to justice”.

Umunna went on to state that “the current employment tribunal system is unfair, unsustainable and has resulted in prohibitive costs. Affordability should not be a barrier to workplace justice, but it would be a mistake to simply return to the system of the past, where tribunals were so slow that meaningful justice was not available.”

Reacting to the proposals, lobbying group the CBI said that while the current system could be improved, there was not a case for abandoning it entirely.

So it seems unlikely any change introduced by the coalition government or (should they get the opportunity) a future Labour government will be a return to the system of old that was criticised for attracting spurious claims. Having set out to reduce employment tribunal claims though, it seems that the fees have had too significant an impact and therefore some form of change is inevitable.

Whilst some critics of employment tribunal fees suggest that unscrupulous employers might take advantage, thankfully most employers want to get the best from their employees. This means operating sound HR practices and adhering to employment legislation. So whilst this is the case regardless of any changes to the fees, HR professionals and employers alike eagerly await the outcome of Unison’s High Court appeal.

If the government loses the case it has promised to repay all claimant fees to date. A loss for the government might also raise questions as to whether employees deterred by the fees, might now have an opportunity to raise employment tribunal claims. This would of course open the door to a huge back log of claims, so let’s hope it is unlikely even in the event of a successful challenge by Unison.

Watch this space and we’ll keep you informed!