Fees for Employment Tribunals - An Employer's Charter to Dismiss, Discriminate and Subject their Staff to Detriment

The Enterprise and Regulatory Reform Bill received Royal Assent on the 25th of April.

One of the provisions, not commented on widely, is the power for Ministers to prescribe fees for the use of the Employment Tribunal system.

This article explores the implications of such a move and highlights a popular concern; that the law, albeit indirectly, now grants employers permission to dismiss, discriminate and subject employees to detriment without fear of redress.

Background

In bringing forward proposals, the UK Government argued that it was necessary for claimants to share the burden of Employment Tribunal running costs, in much the same way that civil court litigants share the cost of claims in the court system.

The Government has already made cuts to the English legal aid system and the Scottish Government is following suit here. Similarly, all Government departments across the board have been asked to find cost savings.

Taking the general background into account, the question arises - why should the Employment Tribunal system be immune?

The Employment Tribunal System

First of all, it is important to remember that the Employment Tribunal system was created as a distinct mechanism for resolving work place disputes. This was done, almost exclusively, to keep employment related litigation out of the court system.

Another important aspect to recall is the very specialist nature of employment law. This branch of law, unlike its cousins in criminal or family, is largely the preserve of lay practitioners - whether in the form of Human Resources personnel or within the gambit of Trade Union officials.

Employment lawyers, whether Solicitors or Advocates (Barristers in England, Wales and Northern Ireland) are in relative terms latter day participants in this particular field.

The subject itself is also extremely practical. This is why, amongst other things, the constitution of an Employment Tribunal was set up to involve 3 judges; 2 of which were lay persons representing both employer and employee perspectives. The other judge, being the Chairman of the Tribunal, being legally qualified - although not necessarily a lawyer.

Procedure in the Employment Tribunal was to be kept simple and straight forward in order to properly reflect the character of the litigation coming forward.

Employment Tribunal - Bogged down in Procedure

Unfortunately, as legislation developed and more lawyers became involved in the system, procedure and practice evolved - or devolved - depending on your point of view.

There came a point where a typical Tribunal hearing would not actually get into the substantive of any claim before first trawling through procedural arguments such as time bars, qualification periods for certain claims, correctly completed forms with relevant date stamps and so on.

In my view, it was the over emphasis on procedure, that lead to increased costs in using the system.

Indeed, many of the procedural arguments continue to be used as a-typical defences by employer respondents seeking to avoid any litigation on the substantive of a claim.

The Government has placed over emphasis here in blaming claimants for raising claims, rather than on respondents for failing to address the issues that gave rise to the claim initially.

This is why we now face fees from September.

A Free system - Protecting Employees

In effect, one of the barriers preventing an employer from unfairly dismissing an employee, or from discriminating, was the threat of an Employment Tribunal claim.

Employees, who have a number of rights and responsibilities, are protected in law from unfair dismissal, from discrimination and also from detriment for seeking to avail themselves of their employment rights.

It will now cost £160 to raise a claim and an additional £320 to take the claim to a full hearing.

If you are seeking to claim for unlawful deduction from wages, non payment of holiday pay or for breach of contract, it could be cost prohibitive to raise a claim. This means that employers will be able to simply get away with it.

What is the point of having legal rights if they are rendered unenforceable?

Who will pay?

Certain high value claims, such as multiple claims for equal pay for instance, are unlikely to be affected by the introduction of fees. However, as some stage, someone will have to pick up the fee; who will pay this? The Trade Union? The Claimant?

If you are already in low paid work, it is unlikely that you will be in a position to pay the proposed fees. Similarly, if you are in part time work, it is also likely to be cost prohibitive to raise an Employment Tribunal claim.

Fees Discriminate

It is worth pointing out that women and disabled people are often in low paid work and part time work. On this basis, it could be said that the proposed measures indirectly discriminate; whether or grounds of sex, disability or some other protected characteristic.

This is yet another reason why the proposed fee structure is wrong.

Alternative Dispute Resolution

The Government is seeking to encourage would be litigants to resolve disputes through compulsory mediation via ACAS. This approach is not without merit, however is not very pragmatic.

ACAS has been empowered to act as a mediator for some time. Although one party may be willing to settle, any respondent, represented vicariously through their insurance company, always requires the litigation to proceed, at least to an early stage, before agreeing to settle.

In the absence on a free to use system, there will no longer be an incentive for respondents to settle, even with the intervention of ACAS. The employers will simply stand back, go through the motions and know that no claim will proceed on grounds of cost.

Fees in the Courts

One of the arguments used to justify the fee system is that the Employment Tribunal system should now be looked on as as another court, rather than as a Tribunal.

However, in Scotland at least, it does not cost £160 to raise an ordinary cause action (next level above small claims). Similarly, it does not cost £320 to proceed to a Proof (hearing). There are various fees associated with serving documents through sheriff officers etc.

Future Concerns

My concern here is that the very specialist nature of the Employment Tribunal system is eroding.

If it is more cost effective to litigate in the civil courts, then what is the point of having a separate and distinct system to reflect the very practical nature of employment law?

More specifically, is it now fair to expect the local Sheriff Court (Crown / County in England) already struggling under the burden of multiple small claims, criminal and family actions to now take on the mantel of employment law?

There are many challenges ahead for employment law practitioners in future.

Only time will tell, post September, whether or not the new fee bases system, survives the test of judicial intervention.

All things being equal, it looks as though employers have just been granted a Charter to dismiss, discriminate and subject their staff to detriment without fear of redress.