Employment tribunal fees: are they blocking access to the tribunal system?
Author: Darren Newman
Consultant editor Darren Newman examines the impact of the introduction of employment tribunal fees on the number of tribunal claims being brought.
One should always approach employment tribunal statistics with care. They can easily be distorted by large multiple claims and it can be very difficult to glean what is really going on from a single headline figure. Nevertheless, the official statistics published on 13 March are stark. They show that the total number of individual claims (as opposed to multiple claims brought by groups of employees) in the three months to December 2013 fell by 64% when compared with the number for the same quarter in 2012. When the total number of claims (single and multiple) is considered, there has been a fall of 79%.
Whatever allowances are made for an overall downward trend in the total number of cases, the winding down of large-scale cases like the holiday pay claim for British Airways pilots (see Employment law manual > Holiday and holiday pay > A week's pay), or the possibility that a number of claims are waiting in the wings while a decision is made on the remission of a fee, this is a startling fall and one that cannot be ignored. Nor can there be any doubt about the main cause of the downturn: it is clear that the fee regime introduced in July 2013 has had a significant impact, acting to deter individuals from bringing employment tribunal claims. To many of us this is not a surprise in itself. However, the sheer scale of the fall in claims is shocking.
Of course, if you see employment law only from the point of view of an employer, you might regard this as good news. Fewer claims means less of a burden on business and less of a risk when deciding to dismiss. The Government obviously feels some temptation to regard the dramatic fall in claims as a positive development. In a speech to the Federation of Small Businesses on 28 March, Matthew Hancock MP said:
"And since every new hire is a risk, we have reformed employment laws and employment tribunals so businesses - especially small businesses - have greater confidence in taking on new staff.
"Our tribunal reforms are working. Jobs are up and the number of cases taken to tribunal is down 80%. The only work being hit by our tribunal reform is the workload of employment lawyers."
Leaving aside the glib and slightly offensive reference to employment lawyers, this certainly seems to indicate that the Government welcomes this fall in the number of claims and accepts that it has come about because of its "reforms".
It may not be wise for the Government to claim too much credit however. When Unison challenged the introduction of tribunal fees by judicial review last year, one of its arguments was that fees would deter individuals from bringing claims. Since some of those claims would be in relation to rights based on EU law, Unison argued that the fees contravened the "principle of effectiveness". This principle, set out in the European Court of Justice decision of Levez v TH Jennings (Harlow Pools) Ltd [1999] IRLR 36 ECJ, requires that the procedural requirements for bringing a claim should not make it "virtually impossible or excessively difficult, to exercise rights conferred by EU law".
In the course of the judicial review proceedings, the Government denied that its intention was to deter individuals from bringing tribunal claims. Responding to allegations from Unison that there had been a dramatic fall in the number of cases brought, the Lord Chancellor argued that it was simply too soon to tell; the application was premature and the Court should "wait and see how the system will work in practice". The Court agreed, but went on to say: "The hotly disputed evidence as to the dramatic fall in claims may turn out to be powerful evidence to show that the principle of effectiveness ... is being breached by the present regime."
A dramatic fall in the number of claims being brought is precisely what the Government does not want to achieve, because it undermines its argument that the fee regime does not block access to the employment tribunal system. The Court was particularly concerned about the impact of fees on discrimination claims, since protection from discrimination is recognised as a fundamental aim of EU law. From the recent figures it would appear that sex discrimination claims are down by 79%; equal pay claims by 83%; race discrimination claims by 57%; age discrimination claims by 63%; and disability discrimination claims by 58%. Does the fee regime act as a deterrent to potential claimants? These figures surely speak for themselves.
The High Court hearing the judicial review refused to strike down the system of fees, but Unison has sought permission to appeal to the Court of Appeal. These figures must surely strengthen its case. However, even if permission to appeal is not granted, the High Court made clear that Unison would be able to bring fresh proceedings if evidence of the fee regime in action showed that a large number of individuals were being deterred from bringing claims.
Of course, this does not mean that the judicial review will now succeed. The principle of effectiveness is a vague concept and it is not clear how much of a fall in claims is needed to show that it has been breached. We should also remember that any single set of figures can be misleading and we may yet see the numbers bounce back. A further complication is the recent introduction of the Acas early conciliation scheme, which is certainly intended to reduce the number of claims and which may make it more difficult to analyse the cause of any further decline in tribunal claims.
Whatever the legal position, however, the Government must surely accept that the introduction of employment tribunal fees has had a greater deterrent effect on potential claimants than it either expected or intended. An urgent review of the system is clearly called for. If the Government is not prepared to undertake that voluntarily, it may ultimately be forced to do so by the courts.
