The government’s announcement of its review of the impact of employment tribunal fees has once again cast a spotlight on this contentious issue. The government made a commitment to this review when the fees were introduced in July 2013. The review aims to consider how effective the introduction of fees has been at meeting the objectives for their introduction, while maintaining access to justice. The review will also consider the effectiveness of the fee remissions scheme.

By way of reminder, a quick overview of the tribunal fee system. Individuals lodging a claim at an employment tribunal are required to pay an issue fee of either £160 or £250, as well as a hearing fee of either £230 or £950. The higher fee is payable in respect of claims of unfair dismissal, whistleblowing and discrimination. If an individual wishes to appeal a decision in the Employment Appeal Tribunal, they must pay a £400 issue fee and a £1200 hearing fee.

The government’s objectives in introducing tribunal fees were, in summary, to transfer the cost from the taxpayer to service users, to encourage the use of alternative dispute resolution services and to improve the efficiency and effectiveness of the tribunal.

Opponents of tribunal fees have expressed concern that the fees impact on the ability of individuals to access justice, and they have been subject to an ongoing judicial review brought by Unison. The union have argued that the introduction of fees denies access to justice for workers treated unfairly by employers and is therefore unlawful, and that the introduction of fees has a disproportionate impact on women.

But what does the evidence suggest nearly two years after the introduction of the fees? There has undoubtedly been a significant drop in the number of claims being brought to employment tribunals – a decline of almost 70%. Whilst that statistic is compelling, does this necessarily mean that the tribunal fees are acting as a barrier to individuals bringing meritorious claims? Furthermore, is there a correlation between the introduction of tribunal fees and the number of claims which are successful at hearing, or indeed the level of compensation awarded by the tribunals?

Recent findings in the Equal Opportunities Review are incredibly interesting in this respect. Whilst the number of claims made to employment tribunals has fallen by around 70%, the number of cases where compensation is awarded for discrimination has not declined. Furthermore, tribunal awards were generally higher in 2014 as against 2013, with an increase in the overall average of 77% – to £21,339 from £12,023. There has also been a 52% increase in the median award – the first increase in the median for five years. The only areas which did not experience an increase were sexual orientation and religion or belief cases (there were only three and two cases respectively). Another interesting development is that the average level of injury to feelings has moved from the low Vento band to the middle band. The full analysis can be found here.

In its impact review the government may, on the basis of the above findings, argue that the tribunal fees have achieved their original objectives – a fall in the number of claims brought in the employment tribunal, but not in the number of awards made. Does this show that individuals with meritorious claims continue to bring them, and are compensated accordingly? Or is it the case that individuals who have been required to invest in their claim are taken more seriously and are less prepared to settle? The review is expected to be completed later in the year and the government will then consult on any proposals for reforms to the fees and remissions scheme.

Posted on 03/07/2015 in BWB Publications

Back to Knowledge