Bold and right: Labour pledges to make workplace justice affordable

Following the introduction of fees in July 2013 there has been a 66 per cent drop in the number of employment tribunal claims



Labour’s promise to overhaul the coalition’s employment tribunal fee system is exactly the sort of policy we need from Ed Miliband’s party – one that shows they have the courage of their convictions.

This is policy that, by promoting workers’ rights and social justice, is likely to provoke hysterical and unfounded accusations from our right-wing press that Labour has declared war on business. But this time Labour has not bowed to the media barons.

Page 15 of the Labour Party manifesto says this:

“Labour will reform the employment tribunal system to ensure workplace justice is affordable.”

It clearly has stiff competition, but the introduction of extortionate fees to bring an employer to justice has to be among the most iniquitous policies we’ve seen in the past five years.

If, for example, you’ve been unfairly dismissed or are a victim of discrimination, you face a fee of £250 to issue your claim in the employment tribunal and then a further fee of £950 – yes, £950 – to have your case heard. If your employer has dismissed you without paying you notice pay or has failed to pay you in full, you have to find £160 to issue your claim and a further £230 for the hearing. (It’s true that there’s a means-tested fee remission system in place but it’s highly limited and ineffective – see below).

Following the introduction of fees in July 2013 there has been a 66 per cent drop in the number of employment tribunal claims.


Source (click on image to enlarge)

The government’s stated purpose of fees was to end weak and speculative claims against businesses. Fees were also said to be necessary because ‘taxpayers are currently subject to an excessive financial burden as this free service has become increasingly utilised.’ As a government press release put it, ‘Last year, the taxpayer footed the full £84 million bill of running the tribunals, despite the fact that most people will never use the service.’

This claim that employment tribunals were being increasingly used is, well, not true. As the Citizens Advice Bureau points out in its excellent report on the subject, Fairer Fees:

“The Ministry of Justice’s own figures show that the individual ET claims fells for each of the three financial years before fees were introduced (from 71,000 in 2009/10 to 55,000 in 2012/13). So despite a growing workforce, the number of individuals using the free service was dropping.”

To put the £80 million annual cost of running the employment tribunals in context, the tax break for married couples costs around £700 million a year and the bonds for the UK’s wealthier pensioners will cost the taxpayer approximately £350 million. This gives you some idea of the coalition’s priorities.

And have fees succeeded in deterring those with weak claims while ensuring that the genuinely mistreated can still access justice, as the Tories claimed it would?

No. Not at all.

In fact, of the reduced number of claims that have made it to tribunal since the introduction of fees, a higher proportion of claims have been unsuccessful than before their introduction. This means that fees have prevented a large number of workers with genuine claims and good prospects of success from accessing justice. These thwarted claims will include, for example, women who were dismissed for being pregnant, disabled workers whose employer refused to make reasonable adjustments to enable them to do their job and workers whose employers have not paid them their full wage.

These fees hurt pretty much all employees. Employers know how much harder it now is for employees to bring a claim. The deterrent against exploitative, unscrupulous and unlawful behaviour by bad employers is therefore much weaker.

This is why the Tories’ attempt to pit ‘taxpayers’ against those who use employment tribunals is a false and dangerous dichotomy. Most of us will thankfully never have to bring our employer to an employment tribunal, but a system that provides accessible legal protection not only gives every employee (aka ‘taxpayers’) the security of knowing that they can seek redress should things go wrong, the effect of an accessible justice system provides a deterrent which makes things less likely to go wrong in the first place.

As with most Tory reforms, the groups likely to be worst affected are the weakest in society. The lowest paid, non-unionised workers were already most likely to be treated poorly by employers; now they are even more exposed.

But it’s not just employees who benefit from an accessible employment tribunal system, it is also honest employers. As the CAB notes in its report, unscrupulous employers know that they can unlawfully deduct wages from staff and that very often those employees will not be able to claim back those wages in the courts. Bad employers can undercut honest businesses in this way.

There are those who point to fee remissions in an attempt to argue that the system is fair. But a large number of people who struggle to make ends meet do not qualify for a remission. If you are a single person with no children, you are only able to bring your claim for free if you earn a gross monthly income (note gross, not net) of £1,085 or less. There is a sliding scale of fees after that point and it goes up pretty steeply. If you’re part of a couple and have no children, you are only entitled to a full remission if your joint gross monthly income is £1,245 or less.

If you have children then the threshold increases by £245 per child before you have to pay, but – and it’s a big ‘but’ – child benefit, working tax credits and child tax credits all count towards gross monthly income. This means that very disadvantaged people often find themselves having to pay a significant proportion of the fee.

So Bravo, Labour. So long as it’s implemented right, this is a policy that will make a huge difference to ordinary people’s working lives.

Annie Powell is a contributing editor at Left Foot Forward. Follow her on Twitter

16 Responses to “Bold and right: Labour pledges to make workplace justice affordable”

  1. Mike Stallard

    Annie, where do you work?

  2. Leon Wolfeson

    Screw “overhaul”. It’s a weasel word.

    Either it’s “scrap the fees” or the intention is to maintain substantial fees.

  3. Faerieson

    “The government’s stated purpose of fees was to end weak and speculative claims against businesses. Fees were also said to be necessary because ‘taxpayers are currently subject to an excessive financial burden as this free service has become increasingly utilised.’ As a government press release put it, ‘Last year, the taxpayer footed the full £84 million bill of running the tribunals, despite the fact that most people will never use the service.”

    Well, there you go, another case of Government looking after ‘the taxpayer?’ Alternatively, we could trace many of these disputes back to their known source- the often feudally-thinking employer- and be clear that it was frequently the lordly behaviour of the employer who would have initiated these claims, thus costs, by not observing their employees’ rights in the first case.

    As soon as any Government starts talking about ‘looking after the tax-payer’ we can be sure that someone’s about to get shafted. Let’s hope the term ‘overhaul’ is not also to be misused.

  4. Leon Wolfeson

    “Let’s hope the term ‘overhaul’ is not also to be misused.”

    The entire point is it’s not “scrap” – it WILL thus be abused. I expect something like, at best, mandatory contingency fees so you lose a third of your award in fees, etc.

  5. Faerieson

    I’m also not overly hopeful.

  6. treborc1

    Join a Union then you can fight it for free..

  7. Bosun Higgs

    More money for lawyers, then.

  8. Leon Wolfeson

    There’s a cost to having a working legal system – one where people have rights. If companies need to lawyer up when they do things like not pay workers…

  9. Bosun Higgs

    When Industrial Tribunals were invented, they were supposed to be informal, plain-language forums where the employee and employer would each put their case and an expert, or experts, would come to a reasonable decision. Many of the matters that they had to decide were based on concepts of fairness, rather than precedent or black-letter law. Then the lawyers started to mine the Tribunals for paydirt. There were no-win, no-fee contracts, the desire to launch a career by winning a really big case, and class warfare on one side; on the other, the desire to crush an employee ‘pour encourager les autres’. Lawyers became the only solution to the problems created by lawyers. Only if we could make the Tribunals lawyer-free zones, perhaps by introducing an inquisitorial rather then adversarial system, can they be made to work properly again.

  10. Leon Wolfeson

    In fact, very, very few claimants have lawyers, except in discrimination cases. It’s companies who are spending the cash.

    You can’t stop people asking a lawyer for advice on what to say in a tribunal, but even that is rare in unpaid wages cases, which are usually decided on the facts. The big payouts simply are not there in those cases.

    Hating on lawyers rather than looking at a system which was working fine, and in fact the number of cases was dropping – and better filtering was under discussion – and introducing fees which have priced people out of getting unpaid wages…

    (I know it would have been a problem for both my claims, where the companies were in the wrong and knew it – both paid up the wages due (one 100%, the other was about £30 short so…yea, I stopped there), *before* ACAS contacted them to try and negotiate before the tribunal. But these days, I’d be forced to press on to the hearing to recover the fees, meaning I’d not have accepted the settlement, it being against my financial interest to do so! Heck, I probably would have had to borrow from a high-rate lender just to FILE the first one!)

  11. Bosun Higgs

    As for hating lawyers, I write as I find. Being in business, I am pestered by opportunistic litigation lawyers. While I have never yet lost a case, the only winners in most cases are the lawyers, once one has deducted irrecoverable costs and enormous quantities of time lost going over the same ground a dozen times and hanging around squalid courtrooms. Commercial lawyers do useful things; litigators only suck your blood and drag you through the desperately inefficient, defiling litigation process. My only Employment Tribunal case was with a guy whom I paid £90k a year for nine months but did nothing useful and, in fact, was helping to run his family’s business while supposedly out with customers. But one still can’t actually WIN. So I am still convinced that, if lawyers had never latched on to ET cases, no hefty fees would ever have become payable by employees and the world would be a happier and fairer place.

  12. Leon Wolfeson

    Of course you can win – in that sort of case, why did you need to hire a lawyer for that many hours, again? And it sounds like a clear-cut case where HMRC would want a word with him as well.

    Preventing people from accessing legal advice ends up with people not bringing cases they can clearly win, that’s all.

    Your attempts to parse differences between lawyers is downright amusing as well – as long as it’s on YOUR side, all good – but heaven help someone who wants a lawyer to read the contract they’re handed…

    No, the actual effects have been clear. And it’s, as I said, bringing in more and not less lawyers as a % of cases since contingency fee’s the only way increasingly people can afford to do it!

  13. Bosun Higgs

    “Why did you need to hire a lawyer for that many hours, again?”
    Clearly you have never been involved in serious litigation with serious lawyers. I hope you never will be. If you had, you would realise that the clearest facts dissolve into murky slush, that hardly any attention is paid to the rights and wrongs of the case and that it soon degenerates into the long-drawn-out agony of trench warfare. Once the other side has instructed lawyers, you haven’t a hope unless you hire your own. You might as well stroll over the top into the barbed wire and machine-gun fire.
    There was never any suggestion that the person concerned failed to pay tax on his share of the family earnings. I would not know whether he had.
    Employees are allowed to bring a Mackenzie friend, such as a union rep, to tribunals. The important thing is to keep out the mischief of lawyer-led litigation games. Ban employers from bringing lawyers to court. Other tribunals, for instance sports disciplinary tribunals, function successfully with a no-lawyer, no-legal-crap rule and so could the ETs.

  14. Leon Wolfeson

    That, of course, does not cut your legal costs as you’ll still need to do all the prep with lawyers. It just means taking more notes into the meeting.

    And given *ET’s* don’t hinge on anything but the ACAS arbitration and the actual hearing, of course, So…what other proceedings were you were involved in, eh?

    (While you missed my point (deliberately) on tax – it’d be trivial to prove with the tax records, of course, but noo, you didn’t find out. Right.).

    Sports Disciplinary Tribunals have a morass of rules which 100% requires to be extensively prepared by a lawyer, far more so than employment tribunals. Moreover, those tribunals rulings often don’t block representation and can always be appealed to a court of law if they are unfair, which is not true for employment tribunals.

    In fact, they’re governed under an different body of law, whereas Employment Tribunal rules are considerably simpler.

    You’re just lashing out at lawyers, and access to justice.

  15. Tom

    A lot of Employment Tribunal work is done by lawyers for free. You have no idea what you’re talking about.

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