Labour (finally) grasps the nettle on employment tribunal fees

The latest set of quarterly tribunal statistics confirm the ongoing evisceration of workers’ access to justice by the Coalition.

The latest set of quarterly tribunal statistics confirm the ongoing evisceration of workers’ access to justice by the Coalition

As if further proof were needed, the latest set of quarterly tribunal statistics – released by the Ministry of Justice this morning – confirm the ongoing evisceration of workers’ access to justice by the Coalition’s hefty, upfront employment tribunal fees, introduced in July last year.

For the third quarter in a row, the number of new cases is down by some 65 per cent, compared to a year ago. Over the nine months October 2013 to June 2014, just 15,750 employers had a case brought against them, down from 44,000 in the nine months immediately prior to the introduction of fees.

Think of it this way: on average, each of the UK’s 1.2 million employers now faces just one employment tribunal case every 58 years.

Having initially claimed – to gales of hollow laughter – that this dramatic fall in the number of cases was no more than a long-term downward trend, ministers have in recent weeks changed tack. They now acknowledge the scale and suddenness of the decline, but maintain that this is no cause for concern because all the thousands of cases ‘lost’ to fees are vexatious or spurious claims that should not have been brought anyway.

This is not an argument that is susceptible to disproof by analysis or chart – you are either stupid and/or gullible enough to accept it, or you are reasonably intelligent and know that it is simply implausible. Prior to the introduction of fees, not even the wackiest of the employer lobby groups ever suggested that 65 per cent of all cases were vexatious or spurious.

The simple truth is that women subjected to pregnancy discrimination are deciding not to spend up to £1,200 to pursue their (former) employer at a time when their outgoings have gone through the roof, and vulnerable workers subjected to wage theft are similarly deciding not to throw up to £390 of good money after bad. The fees regime is nothing less than a charter for dinosaur and rogue employers, and the case for reform is overwhelming.

So it was very good to hear the shadow business secretary, Chuka Umunna, tell the TUC conference on Monday that the next Labour government will scrap the fees regime and “replace it with a fairer system to ensure that affordability is not a barrier to seeking redress in the workplace”.

This was the first public expression by a shadow cabinet minister of the revised wording on the fees in Labour’s ‘work & business’ policy document, negotiated by NEC member Johanna Baxter at the national policy forum in July. The final version of that document – which hit the inboxes of the party rank and file this week – states:

“The current employment tribunal system, which charges workers for taking their employers to court is unfair, unsustainable and has resulted in prohibitive costs locking people out of the justice they are entitled to. Labour will introduce a system where affordability will not be a barrier to workplace justice … The next Labour Government will reform the employment tribunal system to ensure that all workers have proper access to justice.”

It’s fair to say that Umunna’s comments to the TUC initially caused some bemusement, even alarm, among trade unionists and employment lawyers. Was he pledging to replace the fees regime, or – as the Daily Telegraph reported – the entire employment tribunal system?

However, such jitters are groundless. While Umunna and his shadow business team are certainly open to ideas on how to make the system as a whole deliver more for claimants, respondent employers and taxpayers, the system as a whole is not at risk of abolition. It is the Coalition’s fees regime that is destined for the policy scrap heap, should Labour take office next year.

Which is not to say there would be no fees under Labour. Indeed, Umunna’s comments tend to confirm my view that those pressing for outright abolition of fees are heading for a disappointment.

While net fee income is currently as little as £7 million per year, even that sum would be hard for newly installed ministers to find from elsewhere in their budget (as the Treasury would no doubt insist they do). And restoring effective access to justice would of course increase the number of cases, and so raise variable operating costs – which have shrunk by as much as £34 million per year under fees.

So, not only would Labour’s “fairer” fees regime have to ensure effective access to justice, but it would also need to cover one or more potential holes in the Ministry’s deficit reduction-compliant finances.

Fortunately, there are any number of ways in which that could be done. I have previously floated one possible model, based on nominal issue and hearing fees for both claimants and employers (to defend a claim) and a heftier ‘losing’ fee for those employers found by a tribunal to have breached the law.

But others would no doubt want to do things differently. I get the strong impression that Umunna and his team are now receptive to all such ideas.

Those who want to restore workers’ access to justice through the tribunal system need to put their thinking caps on. And they need to do so now.

7 Responses to “Labour (finally) grasps the nettle on employment tribunal fees”

  1. Gary Scott

    This confirms what most readers will already know, the absolute NECESSITY for union membership. Young workers are especially unaware, especially vulnerable to workplace bullying and the fact so many have failed to take membership is OUR fault (us being the older workers). The Tories blacken the very idea of unions with stories of ‘loony leftists’ and rich leaders and corruption etc. We must show the workers that just as you need car, home even bicycle insurance you need ’employment insurance’ providing direct advice, legal assistance and costs also giving cash payouts should they die or suffer catastrophic injuries. Strong unions lead to proper treatment of workers AVOIDING the need for tribunals. Sometimes I worry Labour has forgotten its roots though.

  2. wildejamey

    At some point it must be conceded that access to justice is more important than any money a government might gain from charging fees, let alone the £7 million mentioned above. What is really concerning are the weasel words of Umunna, which leaves things wide open to replacing one set of fees with another, effectively cutting out access for large swathe of middle earners. Labour have form on anti-worker laws. It was the last Labour government that started the anti-welfare attack, using disreputable assessors, and allowed open season to big banks and business. So they will have be a lot clearer to recover my and others’ support.

  3. Just Visiting

    access to justice is important.

    But I wonder how many readers here have experienced tribunals from the employers side?

    It goes like this. My managerial employee left under a huff. They were not bad at their job, so I met up with them. They seemed inclined to come back, so we agreed terms (slight salary increase) and they came back.
    12 months later they left under a huff. I met with them again, wanted them back, but only if they would agree some words in their contract that would inhibit their ability to go off in a huff.
    They didn’t agree. So went to Tribunal.
    I called round the usual employment solicitors etc – their view was, it’ll cost you £20K in our fees, so if you can settle with her for that – do it! Even though there was no case at all.

    I disagreed, went to tribunal, the case for sex discrimination, and age discrimination was dropped in the first minutes of the hearing. But they stuck to their unfair-dismissal claim.

    They tribunal heard us out

    And now the punch-line: the 3-member panel said – we will let you know our decision on 8 weeks !

    4-weeks, because they have a backlog sending letters out!
    and another 4 weeks: because that exact panel of 3 could not schedule time together to discuss their notes, for another 4 weeks !

    Talk about slow justice.
    Some might think the Tribunal is just a money spinner for solicitors: one sits on the bench, and the other get paid by the claimant+defendent!

    The outcome, I won the case.
    And kept the costs below £10K, by tightly managing the employment solicitor: who despite being a specialist seemed keen to stir up a fight, and treat things in a combative way.

    The cherry on the case: my solicitor said there is no database he could access, listing employment tribunal claimants: so I had no idea if this person had (mis)-used them before.

    But, a freak googling, and I discovered that the person had indeed been at court before (A University study happened to quote the judge’s summary of her case, due to some noteworthy, deep legal angle or other).

    So My view is – the employee can first go to CAB for free impartial advice – and if they suggest you have a case, then why wouldn’t you find the money to kick the case off: the average payout is north of £7,000 I read somewhere – so worth investing.

  4. Richard Dunstan

    The £7m in fee income is perhaps less important than the up to £35m that it would cost in terms of increased case load were fees to be abolished outright. By May 2015, that £35m will have been budgeted out. So incoming Labour ministers would have to find some £40m, in order to abolish fees outright. And, should Labour win in May 2015, those new Labour ministers won’t be able to sneeze without first getting permission from Ed Balls.

  5. Richard Dunstan

    Thanks for taking the time to comment, and to outline your case. A few thoughts in reply. First, that you won your case doesn’t justify sweeping the system away or imposing prohibitively high claimant fees, any more than one example of a claimant winning their case proves that all employers are bad. Second, if as you say the claimant had no case at all, then why did you spend £10k on a lawyer? The average award for UD is indeed about £10k, but that figure is distorted by a small number of very large awards; more meaningful is the median award, which is about £5k for UD. So, it could be argued that you could have offered to settle for the median award, and saved yourself £5k in the process. But I think you did the right thing in contesting the claim, if it was as groundless as you say. Because, if there is any ‘compensation culture’, it could be argued that that is due to far too many employers settling groundless claims that they really should have contested. As for the 8 weeks to produce the judgment – well, no doubt it could be done quicker with more resources, but that would cost the taxpayer more, and I assume you don’t favour that. Finally, I agree there should be a public database of ET judgments, naming both the claimant and the respondent employer. That way, we’d be able to identify both the very small number of repeat or serial claimants, and the far larger number of repeat offenders who serially exploit their staff.

  6. Kitchen Sink

    “it could be argued that that is due to far too many employers settling groundless claims that they really should have contested.”

    So now the employer being harassed by a vexatious claim is the one to blame for settling it and trying to get on with their life without time or financial ruin?

    Have you ever even had to defend against an employment tribunal claim?

  7. Richard Dunstan

    Er, no, I didn’t ‘blame’ anyone. But it is the employers who complain about a ‘compensation culture’, without producing the evidence. The number of ‘vexatious’ claims was always very small, and now (due to fees) such claims are pretty much non-existent. And, anyway, why should a vexatious claim cause you financial ruin? If you can’t deal with it, maybe you shouldn’t be running a business.

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