Employment Tribunal Fees

Richard Arkless Excerpts

Tuesday 1st December 2015 Westminster Hall

[Justin Madders]

The hon. Gentleman is absolutely right on that point, which I will come to later. Speaking from personal experience as a lawyer before I entered this place, I have a number of examples of such situations, and that cannot be right in a fair and just society. Returning to the Justice Committee, it received evidence from Citizens Advice, which published a report called “Fairer Fees” in January 2015. It stated that 82% of its clients said that the fees deterred them from bringing an employment tribunal claim.

All the Government talk at the introduction of the fee regime was about weeding out vexatious claims. As I will go on to demonstrate, there has been no convincing evidence put forward that this system has done anything to reduce such claims, in stark contrast to the significant body of evidence suggesting that people with genuine complaints have not been able to pursue their rights as a result of the fee system. It may be that part of the Government rationale is that those who use the system should contribute to it, in which case far more equitable solutions can be found. It may be that despite everything else, it is and always was part of the Government’s plan to reduce the number of claims being made, in which case they have succeeded.

[Richard Arkless (Dumfries and Galloway) (SNP)]

I thank the hon. Gentleman for securing this very important debate. Does he agree that one of the reasons given in the Beecroft report, which initiated the imposition of tribunal fees, was the desire to make business more efficient, and that the very notion that people being prevented from having access to justice within the workplace would increase productivity and make a business more efficient is completely misguided?

[Justin Madders]

The hon. Gentleman is absolutely right. The suggestion that workplace rights and treating people with respect and decency is somehow an impediment to a business running well is the stuff of nonsense. Having a stable and well-motivated workforce actually helps to improve productivity. The Beecroft report is really where all this is coming from. There is a view that employment rights are somehow an impediment to the good operation of business. If someone has the misfortune of having worked somewhere for less than two years, they effectively have no employment rights, so that has been got through almost by the back door.

Let me return to the reduction in the number of claims. Undoubtedly, that has been stark, and if that is the Government’s intention, it has been successful, but it is unfair, crude and a denial of basic justice. The Citizens Advice report stated that 47% of its clients who were potential type B claimants—those bringing unfair dismissal or discrimination claims—said that they would have to save all their discretionary income for six months in order to be able to proceed with a type B claim. And those are the lucky ones—many who have lost their job have no discretionary income. Keeping a roof over their head and putting food on the table will always take priority over pursuing a claim for which the outcome is uncertain and which will not be resolved for months.

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[Richard Arkless (Dumfries and Galloway) (SNP)]

Like my colleagues, I can confirm that it is a pleasure to serve under your chairmanship, Mr Streeter. Special thanks to the hon. Member for Ellesmere Port and Neston (Justin Madders) for securing what I, like his colleagues, consider to be an extremely important debate.

I rise as a member of the Scottish National party to put the SNP’s case, and I want to start by putting the issue in a Scottish context. The issues of employment law and employment tribunal fees are reserved to the Westminster Parliament. There is an expectation that clause 37 of the Scotland Bill will devolve the financial arrangements and management of employment law tribunals to Scotland. The Scottish Government have a clear policy of abolishing the fees as soon as we have the power to do so. To quote the Scottish programme for government, as my hon. Friend the Member for Glasgow South West (Chris Stephens) did, that will be done

“when we are clear on how the transfer of powers and responsibilities will work.”

The devolution of any part of the administrative justice sphere in Scotland is done through a separate Order in Council. We are yet to see whether the Government will sign off the relevant Order in Council and whether it will include the right to adjust employment tribunals, but we are working on the basis that that is what will happen.

Why does Scotland have an interest in this issue? We could argue that, if these issues are devolved, it will be for Scotland to decide whether to abolish fees. Of course, that disregards the funding arrangements between the UK and Scotland. If fees are abolished in the rest of the UK, Scotland’s funding mechanism will be increased by the extra amount the Scottish Government will have to spend in future years on employment law tribunal fees. While we have a commitment to abolish fees, therefore, unless the fiscal arrangements are correct, Scotland will have to find the money to do so from the remainder of its budget—which we are willing, at this juncture, to do, because that is clearly the moral thing to do.

As I said earlier, the imposition of employment law tribunal fees follows from the Beecroft report. The premise on which it was based was high-handed. The report stated that business must be allowed to grow and to be more efficient, but that employment law impedes that. That statement is very contentious. As I said in my intervention, simply stripping a firm of its cost liabilities and potential need to spend money does not, in itself, make that business more efficient. I would argue that if a business treats its staff correctly, the staff will treat the clients correctly, and that will make the business more productive and efficient. The premise on which the imposition of the fees was based is therefore flawed at best. This is all being done to save the £82 million or so a year that was spent on employment tribunal cases.

The upshot is that someone with a simple claim for being refused time off, or for a breach of working time regulations, faces a £160 issue fee and a £230 hearing fee. For a more serious case of discrimination for wrongful dismissal, there is a £250 issue fee and a whopping £950 hearing fee. God forbid that anyone would ever need to go to appeal, as the combined cost is £1,600 on top of what has been paid for the previous hearing. It does not take a rocket scientist to figure out that this will be a material deterrent to claimants bringing their cases.

Every litigator worth their salt—I speak with some credibility as I used to be a litigator—understands acutely that quite often the way to win a case is not to win a substantive argument, but to pile cost pressure on the other side. This is the Government trying to use a litigious tactic to pile cost pressure on claimants who, ordinarily, just want their grievances heard. It is a disgraceful course of action. The result in Scotland has been a 92% reduction in redundancy claims, an 81% reduction in sex discrimination claims, and a 90% reduction in claims for breaches of working time regulations.

Legally, through free access to employment law tribunals, we went as far as we could in making rights that protect workers absolute; now, they are not absolute. The right to not be unfairly dismissed, to be free from sex discrimination, and to be consulted on redundancy is no longer absolute. I asked the Minister what kind of message this sent out. It sends out a message that it is okay to abuse workers because, essentially, they have no course of redress, and that it is okay for the rest of the workers in that organisation to feel that their fellow workers have been marginalised. That has a direct impact on their productivity levels, wellbeing, morale and, ultimately, the financial success of the organisation for which they work. With these changes, it appears that the lower someone is on the income scale, the more inaccessible justice becomes.

I will pick up on points made by previous speakers. The hon. Member for Ellesmere Port and Neston was right to highlight that tribunals do not just award compensation. They can provide a statement of fact—of terms and conditions that give vulnerable workers clarity about their position in a company. He is also right that there has been substantial evidence to the Justice Committee—which, as a member of that Committee, I have heard—highlighting how much of a deterrent the fees are. He is right to point out that some employers will not even consider the claim until the issue fee is paid. That is piling even more cost pressure on to the vulnerable workers and works in favour of the employer. It tips the balance away from justice and towards employers for no good reason, as far as I can see.

My hon. Friend the Member for Glasgow South West rightly made the point that workers have been priced out of justice. The changes disproportionately affect women, minorities and those at the lower end of the income scale. He is also right to point out that there is wide support in Scottish civic society for the Scottish Government’s policy of abolition.

The hon. Member for Cardiff Central (Jo Stevens) made some excellent points very well. She is right to say that the policy completely makes a mockery of the Conservative party’s claims to be the party of working people, and it is not evidence-based. As with much of the legislative agenda that I have witnessed since becoming a Member in this House, particularly the Trade Union Bill, this seems to be an ideological attack with no evidence base whatever. That follows a consistent theme in the legislation that I have seen come before Parliament since joining the House in May.

[Chris Stephens]

The hon. Member for Cardiff Central (Jo Stevens) also mentioned the wealth creators. Does my hon. Friend agree with me that the genuine wealth creators in this country are low-paid, long-hours workers—many of them women—who are helping to keep the economic wheels turning, yet they are the ones under attack?

[Richard Arkless]

I completely agree with that. Any business that sees its staff as disposable units of production is headed for disaster. I go back to what I said: if businesses treat their staff properly, the staff treat customers properly. If customers are treated properly, the business will be successful. If a business is successful, there is a dividend for shareholders, which, no doubt, is the motivation of the Conservative party.

In conclusion, I urge the Minister to persuade the Government, when he takes this information back to them, that their review should conclude what the Scottish Government, Scottish civic society and Opposition party Members conclude: that they should abolish these draconian fees without delay.

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[Chris Stephens]

rose—

[Richard Arkless]

rose—

[Mr Vara]

I will give way first to the hon. Member for Glasgow South West.

[Mr Vara]

I am certainly not casting doubt on research. If the hon. Gentleman recalls, I said that I was not going to discuss specific issues and specific types of case. It is important to take things in the context of how the debate has been going so far. The hon. Member for Ellesmere Port and Neston spoke in broad-brush terms about the fees coming in and the total number of reductions.

[Richard Arkless]

I politely ask the Minister, when he takes the information from this debate back to the Government and his colleagues, to point out to them that although there may arguably have been a small decline or a trend before the imposition of fees, since then the numbers have fallen off the edge of a cliff. The trend has not continued.

[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.

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[Mr Vara]

I take on board what the hon. Lady says, and I will certainly look into the matter further. On the remissions system, I have already said we are looking to see how it can be made more user-friendly, and we will continue to look at it. The hon. Member for Ellesmere Port and Neston also quoted Lord Justice Underhill in the case in which Unison had been involved. I gently point out to him that both the cases brought by Unison to seek judicial review were rejected by the Court of Appeal. Unison is seeking permission to appeal from the Supreme Court, but let me put it on the record that we will object robustly if the appeal process is granted.

[Richard Arkless]

The Minister is being extremely generous with his time; Opposition Members appreciate that. As part of the brief that he gives back to his colleagues—I am afraid I have had a memory freeze. I will come back to my point. I apologise.

[Mr Vara]

We still have about three and a half minutes, so I am happy to give way to the hon. Gentleman again if necessary.

On the issue of women and pregnancy discrimination, let me make it absolutely clear that it is unacceptable that women, pregnant or not—indeed, anyone—should be discriminated against when there are laws against it. We have strict laws and the Government take the matter very seriously, as do all Members of all parties. The reviews that have been referred to will certainly be taken into account by my Department’s review into the employment tribunals.

The hon. Member for Dumfries and Galloway spoke of the Scottish aspect. I can assure him that my officials are in contact with Scottish officials to ensure that, pursuant to the Smith Commission, there is a smooth transfer in the running of the tribunals. I hope I have managed to persuade colleagues that the matter is not simply about preventing vexatious claims; it is much broader than that and is intended to ensure that where there is a need to reach a settlement with an employer, it is done in an environment that is less stressful than the court environment. Given the financial climate in which we operate, it is right that those who use the court service should in some way contribute to it.

I will conclude by congratulating the hon. Member for Ellesmere Port and Neston on securing this debate. It is absolutely clear from the 90 minutes or so that we have had that it commands a huge amount of interest from colleagues. I am grateful to him for giving his colleagues an opportunity to air their views, and for allowing me to take on board their comments and views and put on the record the Government’s view.