Employment Tribunal Fees

Shailesh Vara Excerpts

Tuesday 1st December 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)]

It is a pleasure to serve under your chairmanship, Mrs Gillan.

I congratulate the hon. Member for Ellesmere Port and Neston (Justin Madders) on securing the debate. It is an important subject, and I know that in his case it is particularly so, given his background as an employment solicitor. I thank the other contributors, the hon. Member for Glasgow South West (Chris Stephens) and the hon. Member for Cardiff Central (Jo Stevens), and the two Front-Bench spokespeople, the hon. Member for Dumfries and Galloway (Richard Arkless) and the hon. Member for Kingston upon Hull East (Karl Turner). I also thank the hon. Member for Ellesmere Port and Neston for allowing me the opportunity to put on record the Government’s position.

The Government recognise the crucial service that employment tribunals provide to those employees who have serious disputes with their employers. It is vital that people in that position have meaningful access to justice and an effective way to remedy their problems.

[Ian Lavery]

If it is that vital for ordinary people in the workplace to access justice, will the Minister explain why his Government introduced a £1,200 tribunal fee?

[Mr Vara]

I ask the hon. Gentleman to bear with me, as I will turn to that issue, and also to the issue of working people that has been mentioned by a number of colleagues.

Hon. Members will be aware that the Government were elected as a majority Government with a clear mandate to eliminate the budget deficit during this Parliament. That requires a responsible approach to funding public services, which must include the courts and tribunals, both now and in the future. When the Government introduced fees in employment tribunals in 2013 it was estimated that the cost of running the service was about £84 million per year. Before the introduction of fees, the whole burden of that cost was met by taxpayers. Fees were introduced to reduce the burden, and to ensure that those who were using the service and benefiting directly from it were making a reasonable contribution to the cost, when they could afford to do so.

At the time the fees were introduced, we also applied Her Majesty’s Courts and Tribunals Service fee remissions. That scheme is there to ensure that those on low incomes are not prevented from lodging a claim. Under the scheme, those who qualify may have their fees waived, either in part or in full, depending on their financial means. I am a little disappointed that although much has been made of the employment tribunal fees, only a passing reference was made to the conciliatory scheme introduced by ACAS, to which I will turn shortly.

As far as remissions are concerned, I am grateful for, and have very much taken on board, hon. Members’ practical comments, and I can assure colleagues that my officials are looking at how applications are made to see how the process can be made simpler and more user-friendly.

[Chris Stephens]

Will the Minister reassure us that he will pay particular attention to cases in which there is a claim for an illegal deduction of wages, the amount of which is lower than the fee demanded by the service?

[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.

[Justin Madders]

I do not wish to labour the point, but the question is simple. We are not asking the Minister to make a decision today; we are simply seeking clarification and confirmation that he is not ruling out the abolition of fees altogether as part of the review.

[Mr Vara]

It is important to appreciate that once the Government website publishes terms of reference, which have been there for many weeks, it is not appropriate to seek to change those terms of reference simply because one is in a debate, no matter how many times colleagues try to press me to respond in that way.

[Karl Turner]

I will give the Minister one last opportunity: is the possibility of the complete abolition of the fees in the review?

[Mr Vara]

I refer the hon. Gentleman to the answer I gave setting out the three objectives against which we are basing the review.

It is important to note that the introduction of fees was designed to encourage parties to use alternative ways of resolving their disputes. Colleagues will appreciate that such means can often be more effective, less stressful and less expensive than formal litigation. For that reason, the previous Administration introduced the new early conciliation service, under which anyone contemplating bringing a complaint to an employment tribunal must first contact ACAS, which will offer conciliation that is free of charge.

ACAS’s evaluation of the scheme during its first year shows that the early results are promising. Although participating in early conciliation is not compulsory for either party, the vast majority do so. In 75% of cases, both parties agree to participate. The scheme was used by more than 80,000 people in its first year. Recent research by ACAS shows that more than 80% of participants in early conciliation were satisfied with the service. Much has been said so far about lawyers acting for people, so it is important to note that we have a free option, without lawyers who charge fees, that will also be less stressful and in an environment that is constructive to arriving at a solution. Sadly, it is often the case that when lawyers are involved, it can be antagonistic. That is not always the case, but it can be the case when two sets of lawyers are acting.

I assure colleagues that it was always our intention to carry out a post-implementation review of the impact of fees on employment tribunals. As Members will be aware, we announced that review in June. The aim of the review is to look at how effective fees have been in meeting the original objectives, as I mentioned. Following their introduction, there has been some concern—it has been expressed today—about the impact fees have had on people’s ability to bring claims before the tribunal. Those criticisms have tended to focus on selected statistics, taken in isolation and out of context. In particular, the fall in the volume of claims issued in the employment tribunal has been pointed to as proof that people are being denied access to justice. That is too narrow a perspective when considering this rather broader issue. The fall in the number of claims is likely to be the result of a number of factors. Crucially, there is a failure to take account of the significant increase in the take-up of conciliation.

[Justin Madders]

The Minister will be aware that conciliation was introduced some time after the fees were introduced. Will he explain why there was such a significant drop immediately after fees were introduced?

[Mr Vara]

I maintain that it is too simplistic to say that the fees were responsible for the drop. If the hon. Gentleman will bear with me for just a moment, I will explain the other reasons that may have contributed to the decline in the numbers. As I have already mentioned, ACAS’s evaluation of the service suggests that the early results are promising. It is noteworthy that the trend was that the number of claims was declining before fees were introduced. It is likely that that was related, at least in part, to the improving economy, which has delivered higher levels of employment. The economy and employment have continued to improve, and it is therefore likely that we would have continued to see a trend of falling claim numbers, irrespective of whether fees were introduced.

[Ruth Cadbury]

The Minister says that there was a decline for other reasons. The figures that we heard earlier in the debate were of 60% drops and even a 90% drop in certain types of cases. Was the level of drop in claims that the Minister saw of that order?

[Mr Vara]

I am giving a general analysis of the number of claims that were made to the employment tribunal. The trend of the total number of claims was declining. The hon. Lady seeks to talk about specific types of cases, and I am not going to go into that. I am talking about the general trend, because the debate and the numbers given so far have been broad and have related to the total number of applications received to employment tribunals.

[Chris Stephens]

rose—

[Richard Arkless]

rose—

[Mr Vara]

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

[Chris Stephens]

Is the Minister casting doubt on the specific research on this matter carried out by Citizens Advice Scotland, Citizens Advice for England and Wales, the TUC and others? Will he write to me with the figures on the declining number of employment tribunals prior to the introduction of fees?

[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.

[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?

--- Later in debate ---

[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.