Tag Archives: Employment tribunals

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.

A pregnant question for new ministers

By Richard Dunstan, Workflex blog editor

Sally, a young woman working 30 hours per week as a waitress and newly pregnant with her first child, was wrongly told by her manager/employer that she was only entitled to take six weeks of maternity leave, and warned that she would be sacked if she did not return to work at the end of that period. When Sally protested that she was legally entitled to 12 months of maternity leave – including nine months on statutory maternity pay – her hours were summarily reduced to just 15 hours per week, a deliberate move to lower Sally’s wages below the level necessary for her to retain an entitlement to statutory maternity pay.

Sally is one of the hundreds of women who contacted the Working Families legal helpline in recent years after being subjected to pregnancy or maternity discrimination by their employer. In 2014, as in previous years, about one in ten of the 2,350 women who contacted the helpline over the year appeared to our advisers to have been subject to such unlawful discrimination.

Sadly, such discrimination is nothing new: in 2005, a landmark investigation by the Equal Opportunities Commission concluded that half of all pregnant working women suffered a related disadvantage at work, and that some 30,000 pregnant women and new mothers were being forced out of their jobs each year. But all the available evidence suggests that – due not least to rapid growth in the use of zero-hours contracts and other ‘casualised’ forms of employment since the onset of economic recession in 2008 – such discrimination is now more common in UK workplaces than ever before, with rogue employers seemingly emboldened to discriminate ever more blatantly.

That’s certainly the impression given by the shocking personal stories posted on  Pregnant then screwed, a new website founded by Joeli Brearley, who lost her job as a self-employed project manager after becoming pregnant with her first child. In Joeli’s own words, the website is intended to provide:

“A place for women to tell their stories anonymously and in their own words. This is not only a cathartic way to release some of the bruising and unfair experiences they have undergone, it is also a medium to shine a light on this systemic problem. It is a way to open public debate and change common perceptions about pregnant women whilst campaigning for more effective laws to protect them”.

In just a few weeks, Joeli has generated an impressive amount of media coverage, appearing on BBC TV’s Victoria Live show and BBC Radio 4’s Woman’s Hour, and in the Guardian and Daily Telegraph. And it must be hoped that newly installed government ministers such as the Minister for Women and Equalities, Nicky Morgan, the Justice Secretary, Michael Gove, and the Business Secretary, Sajiv Javid, have been paying attention while they get their feet under their Whitehall desks.  Because – just as pregnancy and maternity discrimination has become ever more common in UK workplaces – it has also become far more difficult for women to challenge such unlawful action by their employer.

Access to already overstretched sources of legal advice and support – such as law centres and Citizens Advice Bureaux – has been severely curtailed by cuts to local authority funding and the abolition of almost all civil legal aid. In March this year, the justice select committee of MPs reported that one in six law centres have closed since 2013, and that the CAB service has lost 350 specialist advisers. And, perhaps most damagingly of all, the introduction of upfront employment tribunal fees of up to £1,200 by the Ministry of Justice in July 2013 has created a significant barrier to justice, leading to an 80 per cent fall in the number of sex or pregnancy related discrimination claims.

sex

During the General Election campaign, former business secretary Vince Cable conceded that the Coalition’s introduction of fees had been a “very bad” mistake, as the fees are “discouraging people – and especially low-paid women – from pursuing their [legal] rights”. Accusing former Conservative ministerial colleagues such as former justice secretary Chris Grayling of “an act of remarkable bad faith” for failing to carry out a promised review of the fees regime after 12 months, Dr Cable told the Independent “we urgently need a proper review to be sure no one is being denied access to justice”.

As a member of the Alliance Against Pregnancy Discrimination, Working Families believes that conducting that long-promised review of the fees regime must now be an urgent priority for new ministers. In February, shortly before the dissolution of Parliament, then minister for women and equalities Nicky Morgan told the House of Commons:

“We have made a commitment to conduct a review of the introduction of the fees, and we will do so, but we think that this is a matter for the next Administration and the next Parliament”.

Having since been reappointed to her Cabinet-level role, Nicky Morgan is a senior member of that ‘next Administration’, and it must be hoped that she is now pressing the new justice secretary, Michael Gove, to make good on her promise to Parliament. For the blight of unlawful pregnancy and maternity discrimination by rogue employers will not be tackled so long as women are denied effective access to justice.

 

 

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.

Introducing YESS – because life’s too short to litigate

In this guest post, renowned employment lawyer Camilla Palmer explains what led her to establish new charity Your Employment Settlement Service (YESS).

Many bemoan the gender equality gap at work and wonder why it persists after 40 years of equality legislation.  My answer is: ‘It’s pregnancy stupid’ – at least a large part of it is down to pregnancy and maternity discrimination, whether conscious or unconscious, and the long hours’ culture.

For 20 years I have advised and acted for women whose careers have come to an end because their pregnancy has put pay to promotion, career progression and sometimes their job. Too many employers assume that women will not return from maternity leave and if they do, they will have lost their commitment. Common scenarios for returning women are:

  • Your maternity locum has been promoted so you will be reporting to him/her;
  • There is a redundancy situation. We assessed you in your absence and Yes, you are the only person being made redundant;
  • Your pay and terms and conditions will be the same when you return but we have re-allocated some of your responsibilities (the main ones as it happens),
  • We did not want to disturb you while you were away so we re-structured and appointed a new person above you.

Why is there such inequality, isn’t there a law against it?

If you were pregnant or on maternity leave, looking after at least one baby, would you find the time, energy, money to sue your employer to enforce your rights?

Of course, there are a lot of very good employers out there who try to ensure that women do not drop out of work because of punishing long hours or maternity absence. YESS wants to work with these employers and encourage more to follow their example.

Finding a new way

After nearly 20 years of litigating, often for those who suffered discrimination because of their pregnancy or maternity leave, I have decided that enough is enough.  Why?  Because I see too many employees damaged, one way or another, by the litigation process, which is costly, stressful, time consuming and often career suicide.

There has to be another way, particularly now we have high tribunal fees of up to £1,200 (since July 2013), and soon we will have mandatory early conciliation. While free Acas conciliation is good in principle, how does an employee settle a case without knowing if it has legs and how much it is worth?  Acas will not advise on the merits of a claim.

There is no easy fix but we hope that YESS – Your Employment Settlement Service will help employees to keep their job AND employers to improve their equality record.

What does YESS do? Early intervention and negotiation

We advise employees how to settle any dispute, or potential dispute, at the earliest opportunity.  We hope to help employees achieve their objectives, whether this is to stay in their job, perhaps on flexible hours, or negotiate an exit package if it is too late to save their job.  This will include:

  • Reading relevant documents
  • Meeting with the employee
  • Providing written legal advice
  • Negotiating with the employer
  • Advising on settlement agreements

We offer fixed fees once we have done an initial assessment of the situation.

Why YESS

  • We aim to achieve early resolution so avoid the time, stress, costs of litigation
  • We never litigate, so can have a more constructive dialogue with the employer
  • We offer affordable and fixed fees
  • We are a charity; any surplus will go to provide pro bono advice

YESS lawyers are highly experienced, seasoned litigators who have had enough of litigation. They include current and ex-employment judges who understand that many claimants have an unrealistic expectation of what the tribunal can do for them and who have seen the impact of tribunal proceedings on the parties.