As the Justice Committee concludes that high costs are hampering employees’ access to justice, lawyer Kate Booth shares her assessment of the charges
The House of Commons’ Justice Committee has today published its report into the impact of employment tribunal fees on access to justice for workers, concluding that “the regime of employment tribunal fees has had a significant adverse impact on access to justice for meritorious claims”.
New fees for employment tribunals – in two bands – were introduced in 2013. Band A includes claims for unpaid wages, redundancy pay and breach of contract; the claim fee is £160 and the hearing fee is £230. Band B includes all other claims, such as unfair dismissal, discrimination and whistleblowing; the claim fee is £250 and the hearing fee is £950.
When put into context against average earnings and accommodation costs in the UK these figures are substantial and prohibit most workers from bringing a claim. This is corroborated by a Citizens Advice survey, which found that 47 per cent of people would have to save up all their discretionary income for six months to be able to bring a band B claim, and 82 per cent were put off bringing a claim at all because of the level of fees.
The current fee remission system helps only the poorest of households as fees will only be waived if the claimant has disposable capital of less than £3,000 and gross household income of less than a low fixed threshold (eg £1,490 for a household of two adults and one child). Concerns over the impact of the fees were echoed by Lord Dyson [the second most senior judge in England and Wales], who warned the Justice Committee that ordinary people on modest incomes would inevitably be deterred from litigating.
The Ministry of Justice has sought to rely on the introduction of compulsory early claim conciliation through Acas as an alternative form of resolution. However, in my evidence I explained that, while employment tribunal fees remain at their current rates, there is little to encourage employers to engage in early conciliation and in most cases I would advise a respondent to wait and see whether a claimant was prepared to pay the fees before making an offer of settlement.
Although the Justice Committee has accepted that employment tribunal fees have impacted on access to justice, it appears that some level of fees are here to stay, because the report endorses the policy aim of transferring a proportion of the running costs of employment tribunals from the taxpayer to the users. This should be welcomed by employers that were the target of weak or vexatious claims before fees were introduced. The Justice Committee recommends that the fees should be reduced and I believe it is their intention that the reduction should be substantial. The amount charged could be used to strike a balance between the ability of workers to enforce their rights and the volume of claims faced by employers.
The report suggests that the current fee regime should be replaced with either a low single fee or a fee calculated as a proportion of the amount claimed. I would welcome the latter as it should have the added advantage that claimants are put off submitting over-ambitious schedules of loss. It is also recommended that the thresholds for fee remissions are increased to enable more households to benefit from them. These recommendations represent a balanced and fair approach to the difficulties posed by employment tribunal fees. I can only hope they are enacted – and soon.
Kate Booth is a partner at Eaton Smith Solicitors in Huddersfield. She gave evidence to the House of Commons’ Justice Committee for their investigation into the impact of employment tribunal fees on access to justice for workers