Courts and Tribunals Fees

Justin Madders Excerpts

Monday 4th July 2016 Commons Chamber

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I shall start by declaring that I practised as an employment solicitor for many years before I entered this place. My speech will focus primarily on the impact of employment tribunal fees, but I want to start by making a broader point. Many people are still struggling to understand why a majority voted contrary to the mass of economic evidence that leaving the EU would be bad for jobs and growth, and the subject matter of this debate should give us food for thought about why some people voted in the way they did. Messages about risks to the economy will only work if we have an economy that works for the whole population. Therefore, as well as aiming for full employment, we must ensure that the jobs we create are permanent, secure and properly paid. Telling people on zero-hours contracts or in agency work that there was a risk to their jobs from Brexit was not persuasive.

A culture has been created in this country that views employment as a flexible, disposable concept, not as the basic building block needed to create a cohesive and prosperous society. When the few rights that we have are locked away in a system that deliberately prevents people from enforcing them, we should not be surprised that so many voices say they feel disfranchised. For too long, the question of fairness at work has been at the fringes of political debate. I am sure that most hon. Members would agree that opportunity should exist for everyone, that there should be no glass ceilings and that those with different backgrounds should have just as much chance of making it into their chosen job as the next person. Too often, however, lip service is paid to those aims and—crucially, in the context of this debate—little thought appears to be given to the consequences of employment ending. There are workplace rights and protections that this place has deemed a necessary part of the social contract that the Government have with the country, and we must be absolutely sure that those rights can be genuinely be enforced if we are not to have an illusory system of protection. Opportunity, security and sustainability in work should be given as much priority as the creation of the job in the first place.

It is recognised that losing a job is a major cause of extreme pressure and stress in life. Many people who have lost their jobs have no discretionary income to speak of, and keeping a roof over their family’s heads and putting food on the table will always take priority over pursuing a claim, no matter how badly they have been treated. I am aware that there is a fee remission system, but let us not pretend that it is anything more than a fig leaf, because many people do not qualify for it. The average monthly take-home salary in this country is just under £1,800. Remission is not available to people on that salary, yet claimants are being asked to stump up two thirds of that amount to pursue a tribunal claim. It is simply unrealistic to expect them to do that, and I agree with Lord Dyson’s view that

“ordinary people on modest incomes”

will

“inevitably be deterred from litigating.”

We have heard from the Chair of the Justice Committee, the hon. Member for Bromley and Chislehurst (Robert Neill), about the recommendations in his report, so I will not repeat them, but it is quite remarkable that the Committee feels that it has been strung along by Ministers in relation to the outcome of the review of employment tribunal fees. The review was commissioned over a year ago and it has apparently been on the Minister’s desk for nine months. Having heard the Minister previously responsible for this area flounder in a Westminster Hall debate on this subject, I think it is pretty clear that the review has been sat on because the introduction of fees has been a disaster.

We know that this has been a disaster because the number of tribunal claims being lodged fell off a cliff following the introduction of fees in July 2013. Whatever comparisons are used, there has been a drop of around 70% on average in the number of claims lodged. Other Members have already mentioned the fact that the TUC and Unison provided statistics to the Select Committee comparing the number of cases brought in the first three months of 2013 with the number brought in the first three months of 2015. Those statistics showed that claims relating to the working time directive were down 78%, wages claims were down 56%, unfair dismissal claims were down 72%, equal pay claims were down 58%, breach of contract claims were down 75% and sex discrimination claims were down 68%. I am sure that the Government would like to claim that the success of the ACAS early conciliation scheme explains the drop, but that scheme was not in place for the period immediately after fees were introduced, and we know from an ACAS survey that at least 26% of claimants who did not progress their cases said that they did not do so because they found the fees off-putting. Lord Justice Underhill, referring to employment tribunals, has stated in the High Court:

“It is quite clear from the comparison between the number of claims brought in the ET before and after 29 July 2013 that the introduction of fees has had the effect of deterring a very large number of potential claimants.”

The hon. Member for Huntingdon (Mr Djanogly) suggested earlier that the introduction of loans to fund claims might be an option, but who is going to lend money to someone who has just lost their job? That is completely unrealistic. Substantial evidence was put to the Select Committee that fees were encouraging employers not to resolve disputes as they knew that many employees would not be able to find the fee to pursue their claim. This leaves us with unresolved complaints and unenforceable rights because of a Government policy that effectively rewards and encourages bad practice. The Committee reported that many judges say that they now hear no money claims at all. As my right hon. Friend the Member for Delyn (Mr Hanson) mentioned, the report states:

“Prior to the introduction of fees money claims were often brought by low paid workers in sectors such as care, security, hospitality or cleaning and the sums at stake were small in litigation terms but significant to the individual involved. There are few defences to such claims and they often succeeded.”

Like my right hon. Friend, I do not buy for a minute the idea that all those employers have suddenly changed their behaviour and everyone is being paid correctly. What is far more likely is that those whose wages are being docked are saying to themselves, “It will cost me more to go to a tribunal to recover the money than the amount that I have lost, so can I actually afford to challenge it?” The rules have a disproportionate impact on those whom employment laws are there to protect, whether those with the least resources or those who have been discriminated against in work. The current system gives employers an incentive not to respect such rights.

Employment tribunals play a vital role in ensuring that basic rights—such as the rights to a minimum wage, paid holidays and maternity leave, and the right not to be unfairly dismissed or discriminated against—are effective. Valuing those rights, such as they are, is not enough; the ease with which people are able to exercise them is just as important. They are not just about individual dignity and respect in the workplace. They bring important social and economic benefits to the country. They ensure that more people can participate in the labour market without facing unfair discrimination. They give vulnerable workers more job security and stability of income. They help to produce a committed and engaged workforce and encourage the retention of skilled workers, and they allow people to plan their lives and plan for a future, knowing that if they do a good job and their employers run their businesses well, they are likely to stay in work. What we have instead is a “hire and fire” culture, in which workers are seen as disposable commodities—figures on a spreadsheet—rather than people with real lives who actually matter.

It seems to me that the Government are incapable of recognising the importance of employment rights. As we enter a period of tremendous uncertainty with the fallout from Brexit, we need, now more than ever, a Labour Government to protect those whom we represent, and we must all reflect on how best to achieve that. Although I do not doubt that there will be differing views on the way ahead, I sincerely hope that all members of my party will agree that if we cannot unify and present ourselves as a serious Government in waiting, we cannot expect to do a single thing to reverse this contemptible, repugnant race to the bottom.