The Price of Justice?

On 13th July the Ministry of Justice published its response to a consultation on charging fees in Employment Tribunals.

As we have previously reported, the consultation was never about whether ET fees were appropriate – the Government took that as a given; the question was how much ought to be charged.

The Ministry’s Paper includes a draft schedule of fee levels for different types of ET claim.

The “headline” figures include:

Breach of contract £160.00/£230.00.

Unfair dismissal £250.00/£950.00.

Sex discrimination £250.00/£950.00.

In each case there are 2 fees – an “Issue fee” and a “Hearing fee”.

The Issue fee will be payable to start the case. Unless you can foot the bill, or are eligible for some form of remission, you will not be able to commence Tribunal proceedings.

The “Hearing fee” will be payable later in proceedings, but the devil here will be in the detail.

We for example have recently begun a case in the Leeds Employment Tribunal and it has already been listed for a hearing in September 2012. Will the fee under the new regime be payable immediately? Might that be a twelve hundred pounds double-whammy more or less at the outset of the case?

Our concern has always been that individuals (and in particular individuals who are not members of Trade Unions) are going to be denied access to justice by the introduction of fees to pursue Tribunal cases.

Government after Government has crowed from the rooftops about the introduction of new rights – but those rights are worthless unless we have the means to enforce them and to seek a remedy for their abuse.

The new fees are likely to be introduced in Summer 2013. The consultation response is candid about the future: it says, “fee levels are initially set at a rate less than full costs”. The italics are our own – plainly this is the thin end of a fees wedge.

Collective claims pursued by Trade Unions may be more expensive still.

Let’s look at another example: a “complaint by a worker that employer has failed to allow them to take or to pay them for statutory annual leave entitlement” (being a claim under the Working Time Regulations) has an Issue fee of £160.00 and a Hearing fee of £230.00.

That is £390.00 that an employee will have to pay to establish a right to, say, a week’s paid holiday. At minimum wage rates, that would be a fee that exceeds the value of the claim that the employee wishes to make. What price is a week’s holiday?

We note that the Government has not yet made a song and dance about the fact that these fees might be paid, in successful cases, by employers. Tactically it seems to us that some employers are liable to let cases run their course. An employer might well think that an employee is unlikely to risk incurring the full amount of both Issue and Hearing fee, and so decline to look at early settlement in the hope that financial considerations will drive the employee to abandoning their rights. And since the hint is that the ET will have a discretion to award the fees against the employer, might we see cases where the employee wins but still stands the fees – pyrrhic victory indeed.

We understand that if business A and business B fall out about a commercial contract, they can be expected to pay some or all of the costs associated with a Court system that assists them to resolve the dispute between them. That is part of the price of doing business.

Is it now part of the price of being an employee?

Paul Scholey - Senior Partner

For further information on Employment Rights, please visit our website or call 0113 245 0733 and ask to speak with our Employment Rights team.