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Employment Tribunal fees – calls for reform heard but limited proposals for change

Government review of Employment Tribunal fees acknowledges problems but fundamental reform is not on the agenda.

We last blogged in November about the Government response to the Justice Commons Select Committee's report on court and tribunal fees.  At that time, it did not seem that reform was high on the Government's agenda.

Yesterday the Government published its 'Review of the introduction of fees in the Employment Tribunal'.  Coming out of the review there will now be a consultation on specific Government proposals for reform of the system, running until 14 March 2017.  But while the review supports earlier calls for reform, there does not appear to be any prospect of real change to the fee system.

The Review

The review focuses on the 'sharp, significant and sustained' fall in cases brought before the Employment Tribunal since the introduction of fees.  In particular, the Government's focus is on the extent to which the fall can be attributed to the success of the ACAS early conciliation service, as opposed to the inability of potential claimants to pay the fees.

Take up of the conciliation service has been good, but the report nonetheless concludes that that the fees have discouraged between 3000 and 8000 people from bringing Employment Tribunal claims.  The Government's rather insubstantial response to this figure is that 'there is no conclusive evidence that ET fees have prevented people from bringing claims'.  Whether or not there is any meaningful distinction for policy purposes between a strong financial disincentive and an absolute financial barrier is a matter left unexplored.

The Consultation

Despite the 'inconclusive evidence', the Government acknowledges the need to remove the obstacles that exist for some claimants seeking to raise deserving ET claims, and has put forward two key reforms for consultation.

The first is an immediate removal of tribunal fees for claims for payments from the National Insurance Fund i.e. claims for redundancy compensation, notice pay together with unpaid pension contributions and wage arrears in situations where the government guarantees payment because of the employer's insolvency.  No guidance has been given on how this removal of fees has or will be implemented.

The second is a proposal to lift the cap on the means tested 'Help for Fees' fee remission scheme from a gross income of £1085 per month to £1250, in line with the state set National Living Wage.  This cap will not rise with the National Living Wage but will be fixed for the foreseeable future.  This proposal is set alongside a plan to raise awareness of the fee remission scheme.

What this means for employers

Initially, very little.  The proposed new exceptions to tribunal fees will only apply in insolvency claims against the government, so employers will see no increase in claims.

Lifting the cap for the means tested fee remission scheme, if it passes the consultation stage, is also unlikely to produce an immediate effect.  The rise is not substantial, and the Government admits in the report that knowledge of the scheme amongst potential claimants is poor.  As to whether there is a long term increase in claims, only time will tell, but at this moment it seems unlikely that these reforms will have any significant impact.

An interesting backdrop to this review is the forthcoming Supreme Court hearing of Unison's challenge to the fees regime, set for 27 – 28 March.  Unison argue that the ET fees are discriminatory (an allegation looked at by the Government in the review but on which no action was taken).  The case failed in both the High Court and the Court of Appeal, but if successful at the Supreme Court it could result in a wholesale redrawing of the fee regime.  We will of course update you on that decision when it is available.

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