Category Archives: Access to justice

Access to justice: review of employment tribunal fees

By Richard Dunstan, Workflex blog editor

Martha was nearing the end of maternity leave from her part-time job as a receptionist when she contacted the Working Families legal helpline. Her employer had suddenly demanded that she return to work full-time, in the full knowledge that Martha was unable to do so due to the childcare arrangements for her baby’s older sister. Martha was convinced that this was a ruse to force her to resign, enabling the employer to retain her maternity cover, who was willing and able to work full-time.

The helpline adviser talked Martha through the options for challenging her employer, warning that – given the employer’s actions and intransigence to date – it seemed unlikely that Martha would achieve resolution without issuing an employment tribunal claim.

However, when the adviser explained this would involve paying an issue fee of £250 and – if the claim was not then settled by the employer – a hearing fee of £950, Martha was adamant this was not a practicable option: “I simply don’t have that sort of money – I’ve just been on maternity leave!”

Martha is one of more than 40,000 mistreated or exploited workers who appear to have come to much the same conclusion since 29 July 2013, when the fees came into force. For more than 40 years, the employment tribunal system had provided an invaluable backstop in disputes between individual workers and their employer – a legal remedy of last resort – as well as a more general incentive to employers to ‘get it right first time’.  But in August 2013 the number of new tribunal cases fell off a cliff, and has not recovered since.

In the six months up to 31 March 2014, new cases were down 62 per cent on the same period in 2012-13, from 30,095 to 11,508. Cases involving a claim for unfair dismissal were down by 64 per cent, those involving alleged sex discrimination by 80 per cent, and those involving an equal pay claim by 84 per cent.

However, it was never the stated intention of ministers to bring about any reduction in case numbers, let alone a fall of such proportions. As confirmed by the new government’s recent announcement of a long-promised review of the impact of fees, the original aims were simply to:

  • transfer some of the cost from the taxpayer to those who use the service, where they can afford to do so;
  • encourage the use of alternative dispute resolution services, for example, ACAS conciliation; and
  • improve the efficiency and effectiveness of the tribunal.

Furthermore, these objectives were to be achieved “while maintaining access to justice”.

Measured against these stated aims, the fees cannot be seen as any great policy success. In 2014-15, net income from fees (after remission and administrative costs) was just £4.3 million – less than half the £10 million that, in 2012, the Ministry of Justice predicted fees would generate each year, and a relatively insignificant sum in terms of the Ministry’s total net expenditure of some £7.5 billion. (There have of course been more substantial operational cost savings due to the two-thirds fall in case numbers, but such savings were never an officially stated aim of fees).

Early conciliation by Acas is in fact mandatory for all would-be tribunal claimants, who therefore need no ‘encouragement’ from fees to use the service. And it is very hard to see how fees could, by themselves, improve the “efficiency and effectiveness” of the tribunal process – other than by eradicating a large part of the caseload, of course. Any increased incentive for claimants to settle their claim early (so as not to have to pay the hearing fee) will almost certainly have been balanced out by respondent employers waiting to see if the claimant is willing to pay the fee. And, in any case, the proportion of cases that go to a hearing has always been small (about 20 per cent), so any net impact of the fees on such ‘user behaviour’ will have been marginal at best.

So there is really no need to have established a formal review to judge the fees regime against its original objectives. The review’s terms of reference suggest that Ministry officials will spend more time trying to identify and substantiate any factor – other than the deterrent effect of such prohibitively high fees – that might possibly have contributed to the massive fall in case numbers since July 2013. These include an alleged “historic downward trend” in case numbers – a downward trend that ministers seemingly failed to spot in late 2011 and 2012, when they announced and consulted on their proposed fees regime – as well as the impact from “the improvement in the economy”, “changes to employment law”, and “changes in users’ behaviour”.

However, it is already beyond doubt that such factors do not explain the sharp fall in case numbers from late July 2013. For the only significant (and relevant) change to employment law is the above-mentioned introduction of mandatory early conciliation of all potential tribunal claims by Acas, which did not happen until May 2014. And, while there was a gradual decline in case numbers prior to the introduction of fees, quite possibly linked to improvement in the economy, that decline was relatively modest. From the second quarter of 2012/13 to the first quarter of 2013/14 – the last full quarter before fees – the number of single claims/cases declined by just five per cent.

The ‘historic downward trend’ and ‘early conciliation by Acas’

As the following chart shows, even after factoring in both this modest downward trend  and the introduction of Acas early conciliation – which was intended to bring about a 17 per cent reduction in tribunal case numbers – in May 2014, there remains a substantial difference between the number of single cases we could have expected to see in each quarter, had fees not been introduced, and the actual number of such cases.

ETproj

In fact, even after (generously) allowing for these two factors, there were still some 36,200 single cases ‘lost’ to fees, as of 31 March 2015. And, as that number continues to increase by more than 1,500 every month, it is now in excess of 40,000.

Changes in users’ behaviour

There are two potential “changes in users’ behaviour” that might possibly account for some of this missing 40,000 single claims/cases by individual workers:

  • deciding to issue the claim in the County Court, where issue and hearing fees are lower, instead of in the employment tribunal; and
  • deciding not to issue a ‘weak’ or ‘unfounded’ claim.

It is certainly possible that some single claims/cases have been displaced to the County Court. However, all but a few types of claim can only be brought in the tribunal and – while there is anecdotal evidence of some large multiple claimant cases now being brought in the civil courts instead of the tribunal – there is so far no evidence of any significant displacement of single claims/cases.

Although never an officially stated aim of the fees, deterring allegedly “vexatious” or otherwise weak or unfounded claims is the one measure by which some ministers have claimed ‘success’ for the policy of introducing fees. In late 2014, the then Lord Chancellor, Chris Grayling, told the Yorkshire Post that, in introducing fees, the Coalition government was “trying to deal with a situation where it was too easy to go to a tribunal and where employers, often good employers, were easy prey for questionable claims”. And, earlier in 2014, then BIS minister Matt Hancock told the Daily Telegraph that the massive fall in cases demonstrated how “tens of thousands of dishonest workers have been squeezing the life out of businesses with bogus employment tribunal claims for discrimination and harassment”.

However, if all or even just many of the more than 40,000 single claims/cases ‘lost’ to fees since July 2013 were simply “bogus claims for discrimination and harassment” with little if any chance of success, then the overall success rate would by now have risen towards 100%. In fact, as the following chart shows, the success rate has fallen steadily in recent quarters, from 79% in 2013/14, to just 62% in the last quarter of 2014/15. This tends to confirm the view of experienced practitioners that, by and large, it is the ‘high merit but low value’ claims by relatively low income workers that have been deterred by the disproportionately high fees.

outcomes for DB

Does any of this matter? Well, clearly it does if you’re one of the more than 40,000 mistreated or exploited workers who have been priced out of justice since July 2013. But it also matters if you think law-abiding employers deserve a level-playing field on which to compete with their business rivals. The employment tribunal system is intended to ensure a more equal power relationship between the most vulnerable workers and their employers, without which – in the words of Winston Churchill more than a century ago – the good employer is undercut by the bad, and the bad employer is undercut by the worst.

Thank to the fees introduced in July 2013, UK employers now risk facing a tribunal claim just once every century, on average. And that is simply a charter for Britain’s worst employers. A government that truly champions business cannot allow this state of affairs to continue.

Tackling the wrong kind of flexibility: the work of our legal helpline in 2014

By Richard Dunstan, Workflex blog editor

Amid the biggest living standards crisis in a generation, and with research by the Institute for Fiscal Studies and the London School of Economics suggesting that the Coalition’s tax and benefit reforms have hit families with children under five harder than any other household type, 2014 was another busy year for the Working Families helpline team.

Simon, a single parent working for a provider of services to the elderly, called the helpline after his employer refused his formal request to change his work pattern to accommodate an unavoidable change in his childcare. Although employed on a zero-hours contract, Simon had for several years worked five full days a week, including Saturday and Sunday. But now his childcare support had changed, Simon could no longer work weekends, and he was afraid he would have to give up his job.

Simon is one of 2,766 working parents and carers – 85 per cent of them women, and almost one in four a single parent – who telephoned or emailed the helpline in 2014. The helpline team provides free advice on key work-life balance rights such as maternity and paternity leave and pay, provides support on requesting and negotiating flexible working – or with contesting imposed changes to an existing working arrangement – and advises on challenging pregnancy, maternity or other discrimination at work and accessing relevant social security benefits and tax credits.

The team’s annual report, published today, shows that, despite some reduced capacity due to staff changes, and an increase in the proportion of callers requiring more than one interaction, the team advised and supported almost 200 more callers than in 2013. And, as in previous years, the most common issues raised by callers were: maternity leave and pay; benefits and tax credits; other maternity rights; flexible working; and pregnancy or maternity related discrimination.

With essential living costs having risen faster than wages in recent years, and childcare costs continuing to spiral upwards, many of those who contacted the helpline were simply struggling to find a way to make work pay.

Nicky called the helpline shortly after returning to work from maternity leave, because she was struggling with the cost of childcare for her six-months-old child. Nicky earns just over £20,000 per year, and her partner – an apprentice electrician – £15,000 per year. The helpline team was able to confirm that Nicky is receiving the right level of working tax credit, but Nicky feels she has no choice but to give up work to care for her child.

Many of the women on maternity leave who contacted the helpline team were finding it difficult to manage on the weekly statutory maternity pay of just £138.18, capped at below-inflation annual increases since 2013 and equal to just 60 per cent of the national minimum wage.

Jackie called the helpline while on maternity leave and receiving statutory maternity pay, because she wanted to take more than nine months’ maternity leave but simply couldn’t afford to take unpaid leave. The helpline team reports that this is a “very common call”, and that many women in low-paid jobs have little choice but to return to work at the end of statutory maternity pay.

Many others who called or emailed the helpline in 2014 were trying to adopt a flexible working pattern in response to a major change in their caring responsibilities, such as taking on the care of an elderly parent, relationship breakdown, or the onset of disability of a child or partner. And, in theory at least, this became easier from June 2014, with the extension to all employees of the right to request flexible working, previously limited to parents and carers. In the words of the then employment relations minister, Jo Swinson, “we want to see flexible working become the norm, not the exception”.

However, the helpline team report that, if there is one stand-out feature of their work in 2014, it is that the notion of flexible working is simply illusory for all too many of the parents and carers who contact the team for help.

The wrong kind of flexibility

In low-paid sectors like social care, retail, cleaning, and hospitality, hundreds of thousands of men and especially women work on zero-hours contracts and other ‘casualised’ forms of employment that offer little in the way of pay, guaranteed hours or job security.  And what Citizens Advice calls the “hyper-flexibility” of such jobs is all one way.

By their nature, such insecure jobs, with varying and unpredictable weekly hours, can result in significant variations in income, making it hard to arrange (or retain) childcare and disrupting social security payments. But they also make it very difficult if not impossible for workers to successfully request a change in their hours or working pattern to accommodate a change in their family circumstances, or to resist a problematic change in their hours or working pattern imposed by their employer.

For a refusal to work shorter, longer or simply different hours can easily lead to there being no hours at all. And the introduction of upfront tribunal fees in July 2013, unaffordable to many, has made it harder than it’s ever been to challenge any unlawful action on the part of the employer. In the months following the introduction of fees, claims for unfair dismissal fell by 65 per cent, and claims for sex or pregnancy discrimination fell by 80 per cent. In the words of one senior employment judge, it is “difficult to resist the conclusion that access to justice has been curtailed”.

Mandy had worked for a bank on a zero-hours contract for several months without any indication from her employer of dissatisfaction with her work. However, when Mandy informed her employer she was pregnant, her manager stated there had been complaints about her work. And, when Mandy challenged this, the manager changed the story to “you haven’t been working hard enough”. Mandy’s hours were then reduced to zero – in effect, she was summarily dismissed.

Similarly, Denise, employed on a zero-hours contract, had had her working hours substantially cut since she had taken time off for a pregnancy-related illness. When she had challenged her employer, pointing out that several new staff had been taken on, she was told “we need people we can rely on”. The helpline team advised Denise that her treatment amounted to pregnancy discrimination, but Denise said there was no way she could afford to pay the fees of £1,200 to pursue a tribunal claim.

Against this rather grim backdrop, the helpline team can – and frequently does – make a huge difference to the situation of individual callers. Good information and personalised advice empowers callers to make an informed decision about whether and how to negotiate with their employer, the most effective way to challenge unlawful treatment, or how to change their working pattern in such a way to maximise their income once benefit payments, tax credit awards and childcare costs are taken into account.

Evidence from the casework of the helpline team also informs the wider policy and campaigning activity of Working Families, including our ‘families and work’ manifesto for next month’s General Election. So we remain extremely grateful to the team’s key funders, Matrix Chambers and the Big Lottery Fund, and to our many other supporters who make the work of the team possible.

Working parents struggling to hold on to family-friendly jobs

By Richard Dunstan, Policy & Parliamentary Campaigns Officer

In the week that Deputy Prime Minister Nick Clegg called for radical legal and cultural change to “make family-friendly working the new norm in Britain”, the latest annual report of our legal helpline shows too many working parents struggling to hold onto family-friendly employment, and unlawful practice by unscrupulous employers ever more difficult to challenge.

Katrina is a young single mother working in the care home sector.  Two years ago, when Katrina separated from her partner, her then manager agreed to Katrina reducing her hours and working a set shift pattern, as Katrina no longer had anyone to share the childcare with.  However, that manager has now left, and Katrina’s new manager has told her that she must from now on work full-time, and on variable shift patterns. Katrina wants to keep her job, but knows she has little hope of finding affordable childcare to cover the new shift patterns that would now be involved.

Katrina is just one of the 2,585 working parents and carers – 85 per cent of them women – who called or emailed the Working Families legal helpline in 2013.  The helpline team provide free advice on key work-life balance rights such as maternity and paternity leave and pay, time off in an emergency, and unpaid parental leave.  They provide help with requesting and negotiating flexible working (or with contesting imposed changes to an existing flexible working arrangement), and with challenging pregnancy, maternity or other discrimination in the workplace.  And they offer advice on relevant social security benefits and tax credits.

With changes to the social security system – including the ‘Bedroom Tax’ and a freeze on Child Benefit – continuing to hit low-income families hard, and childcare and other essential living costs rising faster than wages, many of those who  contacted the helpline in 2013 were trying to work out how they can make work pay. And others were trying to adopt a new, family-friendly working pattern following maternity leave, or in response to a major change of family circumstances, such as relationship breakdown or the onset of disability of their child.

But in 2013 the helpline’s team of advisers dealt with an increased number of cases in which the caller’s employer had imposed, or was seeking to impose, a significant change in hours or work pattern, without adequate consultation and with little if any consideration for the resultant difficulty in meeting family responsibilities.

Launching the report  earlier today, Working Families Chief Executive, Sarah Jackson said:

A growing number of callers to the helpline are reporting the family-friendly working pattern they have had in place for years being changed or withdrawn virtually overnight, with no opportunity for them to express their views and negotiate either retention of the existing pattern or, failing that, a mutually agreeable compromise.

Among the case studies highlighted in the report:

Kathryn, a mother of three young children, called the Helpline after being told by her employer – a small retailer – she had to increase her hours and work Saturdays, with immediate effect.  Kathryn had been employed by the company for 19 years, during which time she had only ever worked on weekdays.  Kathryn’s partner already worked Saturdays, and the couple could not afford extra childcare for the Saturday.

Robin, a father of two young children, one of them disabled, had been employed as a lab technician for ten years.  For the past three years, Robin had worked from 6.30 am to 2.30 pm each weekday, so as to cover the afternoon school run.  Now his employer had told Robin that he must change his hours to 8.30 am to 5.15 pm, which would make it impossible for Robin to be available for either school run.

Harini, a children’s centre worker, was told that on her return from maternity leave she would have to change her long-established flexible working pattern so as to do more work from the office and less from home, despite her role having become more strategy-based. With the helpline team’s assistance, Harini submitted a formal grievance, and the employer then backed down, allowing Harini to return to work on her previous working pattern.

It is especially pleasing when, as in Harini’s case, our helpline team is able to support many callers through negotiating an agreeable solution, enabling them to stay with their employer.  But the team deal with far too many cases in which the employer is unreasonably intransigent, and the introduction of upfront employment tribunal fees last year appears to have put formal legal action out of the reach of many.

The most recent official figures show a dramatic fall in the number of employment tribunal claims by individual claimants, from an average of 4,530 per month before the introduction of fees in July 2013, to just 1,000 in September, 1,620 in October, 1,840 in November, and 1,500 in December.

This matters, because if vulnerable workers cannot access the tribunal system, then unlawful practice by less scrupulous employers – whether inadvertent or deliberately exploitative – will go unchecked, and more employers will be tempted to similarly disregard the rights of their workers when seeking to make organisational changes.

As employment barrister Natasha Joffe noted recently in a great blog post on Mumsnet, “since July 2013, thousands of people who would otherwise have done so have not complained about breaches of their employment rights. Worse than that, the fact that very few people can now bring claims at all means that the pressure on employers to comply with employment laws is vastly diminished”.

That is clearly unfair to the workers concerned, as well as to the great majority of employers who readily abide by the law and do their best for their workforce. But it also makes the work of our helpline team that much more difficult, and that much more important.

The report concludes that, to protect gender equality, tackle the widespread discrimination around pregnancy and maternity leave, and support the extension (from June) of the right to request flexible working and the new right (from April 2015) to shared parental leave, fees for claimants should – at the very least – be reduced to a nominal level.

The report also recommends that all new fathers should be eligible to at least two weeks of paid paternity leave at the time of or soon after the birth, without having to meet inordinately long service and notice requirements (currently, fathers have to have had 26 weeks service by the 15th week before the expected date of childbirth). And it calls on the Government, trade unions and employer bodies to jointly explore what more can be done to ensure that employers act legally and follow best practice when seeking to make changes to pay, hours or working patterns.

 

Down down, deeper and down: the impact of employment tribunal fees on workers’ access to justice

By Richard Dunstan, Policy & Parliamentary Campaigns Officer

In early 2012, Working Families joined many other organisations – including the Equality & Human Rights Commission, Citizens Advice, Maternity Action and the TUC – in warning that the hefty, upfront fees for employment tribunal claimants on which the Ministry of Justice was then consulting would create a significant barrier to justice. In particular, we noted “an increase in the number of calls to our legal helpline about pregnancy discrimination”, and expressed our fear that fees of up to £1,200 would deter vulnerable women from bringing a tribunal claim for such unlawful discrimination.  But ministers were unswayed, and the fees regime came into force on 29 July 2013.

Last October, our fears appeared to have been realised when, in response to an ultimately unsuccessful legal challenge to the fees regime brought by trade union UNISON, the Ministry released provisional figures showing that the number of tribunal claims brought by individual workers had fallen from an average of 4,380 per month in the first half of 2013, to just 1,003 in September.

In rejecting UNISON’s legal challenge (on the basis that it was too early to reach a firm conclusion on the impact of the fees), the High Court judges noted that “if [these provisional figures] are anything like accurate, then the impact of the fees has been dramatic”.  And the judges suggested that, should the Lord Chancellor’s optimism that the number of claims would soon bounce back to more ‘normal’ levels prove unfounded, then they would “expect the Lord Chancellor to change the [fees regime] without any need for further litigation”.

Well, this morning the Ministry of Justice published tribunal statistics for the three-month period October to December 2013 (i.e. Quarter 3 of 2013/14).  These confirm that the provisional figures issued by the Ministry in October were indeed accurate, as they have not been significantly revised.  And they show that, following the dramatic fall in September, the number of claims by individual workers* picked up only a little in the following three months. There were just 1,618 claims by individual workers in October, 1,839 in November, and 1,504 in December – a total of 4,961.  As the following chart shows, compared to previous quarters the drop is startling.

Chart 1: single claims by individual workers, by quarter, April 2012 to December 2013 ET chart 13 03 14

In short, in Quarter 3 of 2013/14, the number of claims by individual workers was just 33 per cent what it was in the same quarter of 2012/13, and just 37 per cent of the average over the five quarters before the introduction of fees.  And the number of such claims in December 2013 was 35 per cent of the number in December 2012.  I think a High Court judge would call these figures dramatic, and UNISON was quick to call them “shocking”.

Given the evident increase in pregnancy discrimination in the workplace, it is particularly concerning that the number of sex discrimination claims (NB both individual and multiple claims) appears to have been especially affected, falling from 4,342 in Quarter 3 of 2012/13 to just 980 (22 per cent) in Quarter 3 of 2013/14.  As the TUC notes, this suggests that women have been “the main losers” from the introduction of fees.

Chart 2: discrimination claims (singles & multiples) chart discrimination claims

So, it would seem our fears about the impact of the fees on access to justice have been realised.  And, certainly, our legal helpline team has already dealt with several cases in which the adviser considers the client to have strong grounds to bring a tribunal claim, but the client has been deterred from doing so by the fees. Told by our adviser that her only option was to issue a tribunal claim, and what that would cost, one woman retorted: “I can’t afford that, I’ve just been on maternity leave!” Just last week, the BIS employment relations minister, Jenny Willott, noted that it “costs on average £1,800 to present a tribunal claim” for pregnancy discrimination, and that figure does not include the fees.

Ministers have argued that access to justice is protected for low-income claimants by the existence of a fees remission scheme.  However, put against the claims figures released today, the only figures on fee remission applications that the Ministry has been able or willing to release to date suggest that only about three per cent of all claimants obtain any fee remission.

So, will the Lord Chancellor, Chris Grayling, now reform the fees regime, for example by reducing claimant fees to a nominal level, as Working Families, Citizens Advice, the CBI and others suggested in 2012? That seems unlikely, at least for the time being.  I expect to see ministers expressing optimism that the slight increase in the number of individual claims in Quarter 3, compared to September’s stunning low, is a trend that is continuing, and will continue. And justice minister Shailesh Vara is reported by Personnel Today as saying:

“We think that the fees are not the only reason for the fall in the number of employment tribunal receipts; there has been a longer term downward trend as the economy has strengthened, and some of the big [multiple claim] cases involving airlines are now being concluded.”

However, as the following chart shows, the monthly figures for Quarter 3 are way below any marginal, long-term downward trend (the figures for July and August need to be ignored, as they were exceptional months, with a rush to get claims in before the fees came into force on 29 July followed by a compensatory fall in August).  And they don’t suggest a steady upward trend since October either.  At least, not yet.

Chart 3: single claims by individual workers, per month, July 2012 to December 2013 ET single claims, monthly 14 03 14

So, if the number of claims by individual workers does not pick up further in the next quarter (January to March 2014), then the Ministry of Justice is likely to come under intense pressure, not least through further legal challenges in the courts (including UNISON’s appeal). Those quarterly figures are due for release on 12 June.

Mark that date in your diary.

* Note that it is the number of single ET claims by individual workers that most matters here, not the overall (or total) number of claims.  For the latter includes all the multiple claimants in the relatively small number of multiple claim cases, which are much less affected by the fees regime, not least because the fees paid per multiple claim case are capped at six times the fee for a single claim regardless of the number of claimants in the case, which can be as many as several thousand.  And a typical multiple claim case is an equal pay claim brought against a public sector body by a trade union on behalf of hundreds of its members.  

For example, in September 2013 there were 1,003 single claims, and 114 multiple claim cases involving a total of 13,359 claimants; so the overall number of claims was 14,362.  But in April 2013, there were 4,509 single claims, and 404 multiple claim cases involving 5,109 claimants; so the overall number of claims was 9,618. The number and size of the relatively small number of multiple claim cases therefore distorts the overall number of claims in any one time period, and is a misleading measure of the employment tribunal system’s workload.