Employment Tribunal Fees

Jo Stevens Excerpts

Tuesday 1st December 2015 Westminster Hall

[Justin Madders]

I thank the hon. Lady for her intervention and I understand the passion that led her to speak for slightly longer than is the norm. She is absolutely right that pregnancy discrimination is still rife in the workplace. Figures that I have seen suggest that of the 54,000 women who are dismissed on the grounds of pregnancy each year, only 1.5% proceed with a tribunal claim. Is that not a damning indictment of the difficulty that people have in accessing justice?

We need to examine the supposed reasons that the Minister may put forward for why the number of claims has dropped. I am sure that the Government would like to claim that the success of the Advisory, Conciliation and Arbitration Service early conciliation scheme is part of the explanation, but we should remember that the scheme was not in place for the period immediately after fees were introduced, so that cannot explain the number of claims dropping so dramatically immediately after fees were introduced. The figures that we have seen on early conciliation provide little comfort for those seeking to explain the reduction; indeed, as I will argue, the fee system can be seen as an impediment to effective early conciliation.

The figures on early conciliation tell us that of the 60,800 notifications made to ACAS in April to December 2014 as part of the early conciliation scheme, 15% were formally settled by ACAS and 22% progressed to an employment tribunal claim. That leaves a massive 63% that were not formally settled through ACAS but did not progress to an employment tribunal. Of course, it is not possible to identify how many of those claims had merits, but it is too large a figure to ignore, and the similarity between that figure of 63% and the figures that I have already referred to is too much of a coincidence for us to ignore.

[Jo Stevens (Cardiff Central) (Lab)]

Interestingly, if we look at employers taking up early conciliation through ACAS, we find that Government Departments are some of the worst offenders for not participating in early conciliation; that includes the National Offender Management Service, which is very poor at engaging. Does my hon. Friend have any comments on that?

[Justin Madders]

My hon. Friend, of course, has great experience in this area. The Government should be setting an example. They should be leading from the front and be seen to be engaging in the processes that promote and encourage good workplace relations. Is it not really something when we have a Government Department potentially discriminating against someone or impinging on their workplace rights, then refusing to engage with the systems that that Government have set up to try to resolve that dispute? And then the Government charge that person to force their rights. What kind of situation is that? It is not a fair, equitable or just way of dealing with matters.

Let me turn to the significant amount of evidence submitted to the Justice Committee. I think my hon. Friend the Member for Wirral West (Margaret Greenwood) has referred to evidence that was given to the Justice Committee in respect of NOMS, and I recommend anyone who has not read those transcripts that look at that evidence. In it, multiple witnesses demonstrate the deterrent effect that fees have had; that evidence goes well beyond the data that have been referred to.

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[Jo Stevens (Cardiff Central) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Streeter. May I refer the House to my entry in the Register of Members’ Financial Interests regarding my previous occupation as a director of Thompsons Solicitors, which is a national firm of employment law specialists that conducts a substantial number of employment tribunal cases on behalf of trade unions and their members?

I congratulate my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders) on securing the debate. Like him, I am deeply concerned about this issue. As he outlined, the impact of the coalition Government’s tribunal fees has been to price people out of access to justice. The Conservative party calls itself the party of working people, but if there is one single policy that totally exposes that statement as a myth, it is the introduction of employment tribunal fees. The Conservatives knew exactly what the impact of the policy would be, because they and their Liberal Democrat coalition partners at the time were told repeatedly and forcefully that the proposal would decimate access to justice. Just as with legal aid cuts, civil court fee increases, restrictions on judicial review, the Trade Union Bill, the proposal to repeal the Human Rights Act and the intended increase to the small claims limit that the Chancellor announced in last week’s spending review, employment tribunal fees were not introduced to solve a real problem. They were introduced to diminish the voice of ordinary working people, of trade unions and of their members.

I am sure the Government will try to say that the rationale for introducing the fees was to defray the cost of the Courts and Tribunals Service. If that really was the rationale, it has failed spectacularly, because so few people can afford to bring claims that the revenue has not been generated, as my hon. Friend the Member for Ellesmere Port and Neston said.

The Minister for the Cabinet Office and Paymaster General openly stated that the purpose of the fees was to deter people from bringing employment tribunal claims. In an article for The Telegraph website in March 2014, he wrote:

“Unscrupulous workers caused havoc by inundating companies with unfounded claims of mistreatment, discrimination or worse. Like Japanese knotweed, the soaring number of tribunal cases dragged more and more companies into its grip, squeezing the life and energy from Britain’s wealth creators.”

He went on to say that the tribunal system had

“become a system that in too many cases was being ruthlessly exploited by people trying to make a fast-buck.”

Where is the evidence for that? If the situation really was as he stated, the success rate in employment tribunal cases brought after the introduction of fees would have risen significantly, because the fees would have acted as a disincentive for unmeritorious claimants. What has actually happened? The success rate has stayed at the level it was at before the introduction of fees.

Preventing access to justice through high fees, therefore, weeds out not just unmeritorious cases—I accept there will be a few of those—but nearly all cases. In that respect, the policy has been tremendously successful. Fees have had a severe negative impact on the ability of people—particularly those on low and average household incomes and the more vulnerable in society—to access the justice system. That was a shameful intention. We had a Minister openly stating that he and his coalition partners wanted to prevent members of the public from accessing the justice system.

[Ian Lavery]

My hon. Friend will not be surprised by that attack on hard-working people in the workplace who want to seek justice. Like me and other Members, she has experienced the gagging Bill part 1, the gagging Bill part 2 and what is classified as a trade union Bill. All in all, they are a concerted attack on people who just want to get on in life. If there is a problem with justice in the workplace, they want to be able to challenge it.

[Jo Stevens]

My hon. Friend is absolutely right. I could not have put it better myself.

As we have heard, there has been a 69% drop in single-applicant cases since the introduction of fees. However, I want to comment on a couple of other statistics. There has been a 90% drop in sex discrimination cases and a 45% drop in pregnancy-related unfair dismissal cases. That is yet another example of the Prime Minister’s problem with women. He does not want public money spent on women, so they bear the brunt of 75% of his Government’s public sector spending cuts. He does not want to do anything about the grossly unfair VAT regime—the tampon tax. Instead, he cuts funding for domestic violence refuges and rape counselling services, and he makes women pay for those services themselves through the VAT on sanitary products. Furthermore, if any of us is subject to sex discrimination at work or sacked because we are pregnant, he prices us out of access to an employment tribunal to challenge that unlawful treatment.

[Dr Huq]

Does that not make a mockery of the claim the Prime Minister made to me at Prime Minister’s questions that he is now a feminist? How does all this marry up with that statement?

[Jo Stevens]

My hon. Friend makes a valid point. Irony is alive and well in this House. I do not quite know where to start with my thanks to the Prime Minister for the way he treats women.

I turn to what I expect the Minister to refer to as the Government’s mechanism to mitigate people’s being priced out of justice: the fee remission system. Given that the affordability of fees is a central issue in the debate, the remission system’s effectiveness in addressing it is important. However, the reality is that the system is little more than a fig leaf. For each separate fee incurred, a separate application for fee remission, with detailed evidence of income, must be provided. The booklet to guide people through the process is 31 pages long, and the preparation of applications can take up to 30 minutes, increasing the costs of the case every time a court fee is incurred. That work also has an impact on the time of court and tribunal staff. It represents unnecessary bureaucracy, as well as a backward step in the Government’s stated intention to move towards deregulation, efficiency and cost cutting.

In a speech to the Engineering Employers Federation in November 2011, the then Business Secretary, Vince Cable, said:

“I want to make it very clear that for those with a genuine claim, fees will not be a barrier to justice. We will ensure that there is a remissions system for those who need help.”

The latest available information on remission comes from statistics issued by the employment tribunals. They show that, from July 2013 to June 2015, only 17.7% of issue fees requested were remitted.

My hon. Friend the Member for Ellesmere Port and Neston commented on the redundancy fund. Claimants are forced to pay tribunal fees out of their redundancy pay. I really hope the Justice Committee will address that issue in its report on access to justice. I also hope it will look specifically at the terrible problem of employment tribunal fees, which affect women in particular. I ask the Minister to take those comments back to his colleagues to ensure that fees are scrapped.

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[Karl Turner]

Before the short suspension for us to run along to the Division Lobby, I was explaining that there is a difficulty with the Government suggesting that the fee remission scheme is the answer to employment tribunal fees. I said that there were three problems. First, there is the possibility that the remission scheme is not being brought to public attention. As far as I understand it, most people do not know it exists. I have spoken to various law centre staff and citizens advice bureau advisers who have said that people genuinely do not know that the scheme exists and are sometimes surprised to find that it does. Secondly, the fee remission scheme is an absolute minefield. Thirdly and lastly, how can any individual without legal help know what their own legal position is and whether they might be entitled to a fee remission?

I mentioned the first case study, but another one has come to me as an MP. It is the case of Mary, who was employed as a personal assistant. She brought a sexual discrimination claim when her employer was not happy that she had become pregnant. She left the job and immediately found other employment. Even with the fee remission, she was still required to find £840. It is fair to say that she begged and borrowed to come up with that money. However, she said to me that if she had not had family members and friends who were prepared to help her out financially, she would have had a problem. She could not have gone to a loan shark, and clearly she did not want to borrow money, but she considered it and eventually borrowed from friends and members of her family. But for that, she estimated that it would have taken her three months, even on a reasonable salary, to save the money to pay for the fee. We know that the statutory bar for bringing an employment case is three months. Clearly, people are not managing to get the money together to get an application in on time.

Such examples show that since 2010 the Government have attacked the rights of workers. Under the Legal Aid, Sentencing and Punishment of Offenders Act 2012, employment cases were taken completely out of the scope of legal help; the Government have increased the time required to gain employment rights from 12 months to two years; we have seen the introduction of employment tribunal fees; and we have also seen the introduction of the Trade Union Bill, which further dramatically undermines the rights of working people. Any claim that this Government are on the side of working people is utterly disgusting, and I put that in the strongest possible terms. It is absolutely disgusting to suggest that this Government are on the side of working people.

The Government argued that the reason for introducing fees was to prevent vexatious claims, and then they argued that it was mainly to recover the cost of running the employment tribunal service from users who could afford to pay. However, the latest accounts from the Ministry of Justice show that in 2014-15 the net income from employment tribunal fees was £9 million, while the expenditure on the service was £71.4 million. That means that the increase in net income from fees covers 12.5% of the cost of running the service. That12.5% gain in revenue was achieved at the expense of a 69% overall drop in people bringing claims to employment tribunals—tens of thousands of workers deterred from seeking justice for breaches of their employment rights. The evidence must suggest that the Government’s introduction of tribunal fees is purely ideological. It is punitive and shuts thousands of workers out of accessing justice.

[Mrs Cheryl Gillan in the Chair]

I am conscious of the time, and I am keen for the Minister to reply to hon. Members who have spoken. As I said at the outset, they are probably an awful lot better informed on the subject than I am. I do not want to take up too much more time, but I have some questions that I hope the Minister will make a note of and try to answer.

What is the Minister’s assessment of the high expenditure of the employment tribunal service? If it is terribly difficult for him to come up with a full answer immediately, I am happy for him to write to me. Given that the volume of cases is down massively, will the Minister explain why there has not been a corresponding drop in running costs? We are all keen to save money—we all want to make efficiency savings wherever possible—but the evidence seems to suggest that there is no genuine saving from the completely unfair introduction of fees.

[Jo Stevens]

I just want to provide an anecdote. I was talking to an employment tribunal panel member last week. He is supposed to sit for 31 days a year, but in the past 12 months, because of the paucity of cases being brought to the tribunal, he has been able to sit for only nine. We have some expensive people sitting in employment tribunals having to string cases out because people cannot afford to bring claims.

[Karl Turner]

I said that Opposition Members have a great deal of knowledge and experience in the field, and my hon. Friend has just highlighted that. Employment judges, who are paid—I will guess at the amount—probably upwards of £140,000 a year often sit idly without any work, as a result of what the Government have done with fees.

Finally, if, as the Government have claimed, the dramatic fall in the number of cases is down purely to the removal of vexatious claims, why have we not seen an increase in the percentage of successful claims? If the necessity to introduce the fee scheme was about preventing vexatious and unmeritorious claims, surely the success of the claims that are in the tribunal system should be going through the roof, but that is clearly not happening.

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[Mr Vara]

I will not make any instantaneous decisions. I will look at everything in the round. We are considering the matter, and the hon. Gentleman will be aware that we are undertaking a review—which I will come on to—of the whole employment tribunal fees structure, of which I am sure that matter will be a part.

[Jo Stevens]

The Minister mentions the review that is under way. The terms of reference for the review make no reference whatsoever to the question of whether the fees should be abolished. They simply say that the review will make

“recommendations for any changes to the structure and level of fees”.

Will the Government reconsider the terms of reference, and think about whether the fees should be scrapped?

[Mr Vara]

The terms of reference are a little broader than the hon. Lady says. They are “to determine how successful” the employment tribunal fees have been in achieving “the original objectives”. There were three original objectives. One was financial, to consider transferring

“a proportion of the costs from the taxpayer to those who use the tribunal where they can afford to do so”.

The second objective was to consider any behavioural aspects,

“to encourage parties to seek alternative ways of resolving their disputes”,

and the third was to ensure that we maintained “access to justice”. We are carrying out the review in terms of those three broad original objectives.

[Jo Stevens]

May I take it from the Minister’s reply that the question of abolition of fees is not ruled out, in the context of the review?

[Mr Vara]

As I said in reply to an earlier intervention, I am not making any decisions on the spot, much as the hon. Lady would like to tempt me into those waters.

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[Mr Vara]

I take on board what the hon. Gentleman says. As I have said, we are undertaking a review at present.

Other policy reforms, including changes to employment law, which the hon. Member for Ellesmere Port and Neston referred to, are also likely to have had some impact on the figures. It is clear, therefore, that a wider range of factors needs to be taken into account if we are to have a proper assessment of the true impact that fees have had, and that needs to be considered in the round. That is why we are doing a review, and that is what the review will seek to evaluate. If, after the review has reported, the Government believe that there are compelling arguments for changes to the fees structure or to the operation of the fee remissions scheme, we will, of course, bring forward proposals for a consultation, to which Members may wish to contribute.

We recognise that fees are never popular, but in the current financial climate we have a duty to consider all possible ways of ensuring that the courts and tribunals are adequately funded, so that access to justice is protected in the long term. Let me be absolutely clear, however, that at every step we have ensured that the most vulnerable are protected through the fee remissions scheme, so that the burden falls on those who can afford to pay. The conclusions of the review will provide us with a clearer picture of how fees have affected the way people seek to resolve their disputes.

Turning to some of the issues that were raised by colleagues in the debate, there was a charge that the fees were a sustained attack on working people. [Hon. Members: “Yes.”] I do not accept that for one moment. I refer to something that the hon. Member for Ellesmere Port and Neston said in his speech—I will more or less quote him—which was along the lines of, “If you are still working, taking your employer to a tribunal is the last thing you want to do.”

That is exactly why an ACAS proposal and early conciliation is a lot better than going to the tribunal. I like to think that the proposal for ACAS fits in nicely in the context of that interpretation of his sentence. The conciliation system is free. Colleagues talk about considering the working man but it seems that, by proposing to scrap or not recognise the free early conciliation system, they are showing that they would prefer a system where lawyers are instead paid by the people whom they speak about.

[Jo Stevens]

I am glad that the Minister has praised ACAS and the service that it provides. On that basis, will he please therefore speak to his colleagues in government about the fact that Government Departments are not engaging in early conciliation via ACAS, and specifically, on the point that I made earlier in the debate, about the National Offender Management Service?