Since July 2013, it has been necessary to pay a fee to bring a claim in the employment tribunal. This change was introduced with the goal of relieving the pressure on the taxpayer of meeting the £83m bill for running the Employment Tribunal Service. It was also envisaged that it would encourage parties to consider faster and earlier ways to settle disputes.

The level of the fee payable is determined by the type of claim: type A claims (such as unlawful deductions from wages and statutory redundancy payments); and type B claims (such as unfair dismissal and discrimination claims). Part of the fee is paid when a claim is issued (the ‘issue fee’) and the balance is paid shortly before the full hearing is due to take place (the ‘hearing fee’). In total, type A claims cost £390 (£160 issue fee and £230 hearing fee) and type B claims cost £1,200 (£250 issue fee and £950 hearing fee).

There is a fairly complex fee remission scheme in place which involves two tests. Applicants must first pass a disposable capital income test and then a gross monthly income test in respect of each of the issue and hearing fee in order to be eligible for a total remission. Those whose income and capital just exceed the thresholds may be eligible for partial remission.  

One of the major areas of criticism of the remission system relates to the thresholds under the two tests being applied separately for the issue fee and hearing fee. For instance, in respect of the disposable capital income test, for a fee of up to £1,000 the threshold is £3,000, whereas for a fee between £1,001 and £1,335, the threshold is £4,000. This means that for a type B claim, with an issue fee of £250 and hearing fee of £950, the disposable capital threshold which applies is £3,000 for each fee. However, if the two fees were looked at in total (that is, £1,200), a £4,000 disposable capital threshold would apply, which would be more favourable for applicants.

With or without remission, most commentators were shocked by the astonishing drop in the total number of tribunal claims being brought, pretty much overnight. Following the introduction of the fees regime, single claims dropped by 67% and multiple claims by 72%.

Some have argued that this drop can be attributed to the fact that early conciliation through Acas is now a compulsory step before a claim can be brought and many claims are resolved via Acas. Acas, however, has reported that 26% of potential claimants are deterred from lodging a tribunal claim because of the need to pay a fee.  

In light of these startling figures Unison promptly took action and, in 2014, sought a judicial review to challenge the lawfulness of the introduction of fees in the employment tribunal on a number of grounds, including indirect discrimination. This failed at first instance in the High Court due, at the time, to a lack of robust evidence of the impact of the fees regime.

When the fees regime was introduced, the government committed to undertake a post-implementation review of their impact. On 11 June 2015 the Employment Tribunal Fees Post Implementation Review began. Its aim was to consider how effective the introduction of fees has been in meeting the original objectives, while maintaining access to justice. The outcome of the review was expected at the end of 2015 but it has still not been published.

In the meantime, the House of Commons Justice Committee began its own inquiry into the impact of fees across all courts and tribunals. Its report was published on 20 June.

The report identified a ‘startling drop’ in the number of claims being brought, which had not been anticipated by the government before the fee regime was introduced.

The committee did not hold back in its criticism of the Ministry of Justice for failing to publish the outcome of its own post-implementation review, and for refusing to provide a confidential copy to the committee, describing this as detrimental to its work.  The committee commented on the inconsistencies in the government’s account of the progress of its review, the fact that there was no compelling reason to withhold the information gathered by the review from the public, and described the government’s delay as ‘unacceptable’.

It also referred to 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 change it has made’.

Without assistance from the government, the justice committee collated a considerable amount of its own evidence during the inquiry and made some bold recommendations. It concluded that tribunal fees have had a significant adverse impact on access to justice for meritorious claims, yet have made no real impact on the number of unmeritorious claims being brought.  

The committee’s key recommendations to address these concerns are:

  • The overall quantum of fees charged for bringing cases to an employment tribunal should be substantially reduced.
  • The thresholds for fee remission should be increased.  
  • The remission system should be simplified so that the income and capital thresholds assume both parts of the fee will be paid, and only one application for remission should be required.
  • The distinction between type A and type B claims should be replaced with a more subtle three-tier system, or fees should be set based on the value of the claim, with the potential for them to be waived entirely below a set level.
  • Special consideration should be given to women who are alleging pregnancy or maternity discrimination, for whom, at least, the time limit of three months for bringing a claim should be reviewed.  

This report is welcomed by those with concerns about the impact of employment tribunal fees on access to justice, and the fact that some unscrupulous employers have been able to resist settling claims based on a gamble that low-paid staff would not be able or willing to stump up the money required to pursue a claim for unpaid wages.  

The Law Society has urged the MoJ to ‘act swiftly on the justice committee’s recommendation that the fees charged in the employment tribunal should be substantially reduced’.  

In the meantime, Unison has continued to pursue its quest for judicial review. Its second attempt failed at the High Court in 2014 and at the Court of Appeal in 2015, but leave to appeal to the Supreme Court has now been granted and the appeal is set for December 2016. Let us hope that the government will have been able to produce the outcome of its own review by then.

Karen Baxter, Lewis Silkin