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More on Employment Tribunal Fees

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More on Employment Tribunal Fees

Despite ACAS statistics, in our experience there is no incentive on employers to engage in early conciliation.

The landscape for employers has changed over the last couple of years. Since the introduction of Employment Tribunal fees in July 2013 and the mandatory requirement for all potential Tribunal claimants to engage in early conciliation via ACAS before they could issue their claims, there has been a massive reduction in the number of claims issued each year. That reduction is somewhere in the order of 70% when compared with the number of claims being issued prior to the introduction of fees.

There are two types of claim in the Tribunal for fees purposes, type A and type B. Type A claims cost £160 to issue and are for claims such as unlawful deduction from wages. Type B claims cover unfair dismissal and discrimination claims and cost £250 to issue.

Both types of claim also attract hearing fees of £230 for a type A claim, giving a total of £390 in Tribunal fees and £950 for a type B claim giving a total of £1,200 to take the matter to a final hearing. One of the initial justifications for introducing fees was to reduce the number of speculative and/or vexatious claims that were seen as clogging up the system. That was always controversial at best.

Government’s failure to publish report

A report prepared by the Justice Committee of the House of Commons highly criticised the whole regime and called for reform. It is particularly critical of the Government’s own failure to publish its of review the system two years after it was instigated despite the review having been completed for 6 months. Their report states “There is a troubling contrast between the speed with which the government has brought forward successive proposals for higher fees, and its tardiness in completing an assessment of the impact of the most controversial changes is made.”

The Justice Committee’s assessment of the Employment Tribunal fee system takes the view that fees have had “a significant adverse impact on access to justice for meritorious claims”. In addition to calling on the government to publish its post-implementation review of Tribunal fees, the Committee has also recommended that the level of fees be substantially reduced; the type A/type B banding of claims should be replaced by a more sophisticated structure or by a single fee; and that the threshold for disposable capital and monthly income for fee remission purposes should be increased. They also suggest that the time limit for a woman to bring a claim for maternity or pregnancy discrimination should be reviewed, with a view to increasing it from its current time limit of three months.

The report is further critical of the government’s position that early conciliation is helping to achieve access to justice for employees. The Committee records that 83,000 cases were dealt with by ACAS early conciliation and goes on to state that:

“Those cases cannot be simplistically assumed to represent displaced cases which were settled satisfactorily otherwise than by being taken to Tribunal. In many cases the existence of fees erected this incentive for employers to resolve the dispute at an early stage.”

To put it another way our experience has been that there is no incentive on employers to engage in early conciliation until such time as they know whether the employee will pay the Tribunal fee or not. This has been reflected in evidence that was given to the Committee and it therefore seems the introduction of Tribunal fees in fact prevents early conciliation from achieving its objective.

For this reason the landscape has shifted considerably and employers can feel much more comfortable in how they respond to grievances or complaints, as if the employee cannot get fee remission and is unwilling or unable to pay the Tribunal fee the matter will not be progressed further. That may be good news for employers but whether it is good news for access to justice and the wider society is another matter.

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