Two important developments on Employment Tribunal fees

This month sees two potentially important developments in respect of the charging of fees to pursue claims in the Employment Tribunal (“ET”). The charging of fees is a highly controversial area. For some, it helps deter frivolous ET claims; for others, the fee system (and the level of the fees themselves) represents a significant barrier for justice for many individuals.

The first development is the challenge by the public sector union, UNISON, in the Court of Appeal that the imposition of fees are unlawful. The appeal against the High Court decision in December 2014 will take place tomorrow. UNISON challenged the lawfulness of the fee regime by way of judicial review. Their arguments included that their introduction is a breach of EU law, denies justice to workers and has a discriminatory effect on protected groups.

The second is an announcement from the Ministry of Justice at the end of last week that they have started a review of employment tribunal fees and the fee remission scheme generally. When the fees system was introduced in July 2013, the Government indicated that a review was to take place within a year of their introduction to assess their impact. Despite this, July 2014 came and went without any sign of any such review – and indeed, by the time of the election, no review had taken place. The Government announcement states that the review will consider (i) Tribunal data on volumes, progress and outcomes of cases; (ii) financial information, such as income received from fees and the costs of running the system of fee recovery and data on fee remissions, (iii) the general trend of ET cases before and after the introduction of fees and (iv) the extent to which there has been a reduction in unmeritorious claims. It is envisaged to report back later in the year.

The UNISON challenge and Ministry of Justice review comes at a time when the latest figures on the number of Employment Tribunal cases are published for the period January 2015 – March 2015. These confirm a continuing decline in ET claims – but also suggest that only 1 in 5 of applications for ET fee reductions are successful. Frances Barber, General Secretary of the TUC states that “Tribunal fees have been a gift for Britain’s worse bosses allowing many to flout the law” with ”women and the lowest paid” being the “worst affected.” It is not only the unions who have concerns about the fee system. Whilst agreeing with the concept of fees, the CBI have previously suggested that the level of the fees is too high. Currently most claims require employees to pay an issue fee of £250 and a hearing fee of £950.

It is assumed that the latest figures will help UNISON’s appeal – but perhaps not as much as may be envisaged. The statistics have been showing a downward trend of ET claims since the introduction of the fees for some time – indeed, the High Court accepted in December 2014 that there was a striking and dramatic drop in ET claims. However, perhaps surprisingly, the High Court went on to reject UNISON’s challenge anyway; focusing on a lack of evidence of individual cases where a potential claimant had actually been unable to afford the fee. So, the lack of actual examples of such individuals in UNISON’s case was central to their decision and to the challenge failing. This contrasts with what appears to be the more statistical remit of the Government’s review.

So, almost two years after their introduction, the debate about fees and the impact of their introduction continues. We shall await the outcome of the Government’s review and UNISON’s appeal with interest. At the heart of this is striking a balance between employees having recourse to an accessible justice system but at the same time ensuring that the system deters vexatious claimants and/or has sufficient powers to deal robustly with such claims if/when they are brought. Whether the Government review and the UNISON challenge will help achieve this balance remains to be seen.