Election 2015: Employment tribunal fees come under scrutiny

A dramatic reduction in employment tribunal claims since the introduction of fees has led to calls for reform from opposition parties. Are we likely to see a review of the system after the election? 

When tribunal fees were introduced in summer 2013, the primary aim was to reduce the number of frivolous claims; to help employers avoid costly legal fees handling grievances that could be dealt with outside of court.

But it is clear that the impact of fees has gone a lot further than that. The CIPD recently calculated that there has been an overall drop of 70% in claims since the fees were introduced, with a particular fall in the number of discrimination claims brought.

Unsurprisingly, opposition parties have jumped on these statistics as proof that the coalition is unsupportive of employees’ rights.

“Even the Liberal Democrats, who supported the introduction of fees, have expressed concern that the impact has been greater than expected and have called for a review,” says Carl Richards, an employment partner at law firm King & Wood Mallesons.

Labour reform plans

The Labour Party has arguably been the most vocal in its disapproval, pledging a thorough review of the current tribunal system should it get into power.

Confusingly though, in its recently published workplace manifesto A better plan for Britain’s workplaces, it promised to “ensure proper access to justice in the workplace by abolishing the Government’s tribunal fee system”, but then said it would oversee a process led by the CBI and the TUC to “agree reforms” (this may fall short of abolishing fees altogether).

So, short of an outright ban on fees, what would Labour likely introduce as a replacement to the present regime? Richards says: “It seems very likely that a Labour government will make significant change to the tribunal fees system, given the statistical evidence that claims with merit are being deterred.

“It is also likely that this issue will be fairly high up the priority list for Labour and that a review will be quickly implemented if there is a Labour majority following the election.” He points out, however, that a “total repeal” would cost taxpayers money, so would unlikely happen straight away, and would also be unpopular with employers.

Employers are split as to whether or not the system should be left as it is. The CIPD report found that 36% thought fees should be significantly reduced or abolished, and a shade more (38%) felt it should be left as it is.

“Urgent need” for review

The Liberal Democrats would also likely press for a review if they gained any post-election power. At the end of last year, Lib Dem employment minister Jo Swinson wrote a letter to legal aid minister Shailesh Vara to demand he look into the fees regime.

It said: “There is a clear, necessary and now increasingly urgent need for this review to take place. As a Government, we committed at the time of their introduction to review the impact of fees and, 18 months on, this is now long overdue.”

It’s likely, therefore, that both the Liberal Democrats and the Green Party (which has, in the past, pledged to “take employment law out of the hands of the existing judiciary” and run a separate labour court system), would back a major review after the election.

The UK Independence Party (UKIP), meanwhile, would like limits on discrimination and unfair dismissal claims to be re-instated, saying: “UKIP would legislate to ensure the scope of claims which can be heard by tribunals will be greatly reduced.”

Under a UKIP government, no unfair dismissals or discrimination claims would be admitted to tribunals unless employees had at least two years’ continuous employment. At present, there is no qualifying period for discrimination claims, while employees must have two years’ service to claim unfair dismissal, unless in specified circumstances.

One development that could have an impact after the election, whichever party gains power, is Unison’s appeal against the employment tribunal fees regime, which should occur in June. Its second claim for a judicial review was rejected in December, and the union has been granted a further appeal.