The Future of Employment Tribunals

Recent changes to employment tribunals, including the introduction of fees up to £1,200 for employees to have their cases against their employers heard at a tribunal. What is the future for employment tribunals and what is Labour proposing?

In this article, Nicholas C J Lakeland (ncjl@silvermansherliker.co.uk), a partner at Finura’s preferred law firm Silverman Sherliker LLP, examines the recent changes to employment tribunals and what the future may hold.

Following a government decision last year, employees with legitimate claims against their employers face fees of up to £1,200 to have their case heard before a tribunal. Fees were introduced in an attempt to unclog a hugely crowded tribunal system in which thousands of unfounded claims were submitted to be reviewed each year. As a result, fees aimed to provide a “sensible way to weed out weak or vexatious claims” and encourage early resolution of disputes without the need to go before a tribunal.

The changes were largely made in an attempt to recover the annual £84 million bill that emerged from running employment tribunals in the previous system.

Instead, employees that wish to make a claim against their employer are legally required to register their claim with Acas and go through Early Conciliation in an attempt to settle the dispute outside of the courtroom.

If an agreement can’t be reached, Acas will issue the employee with a certificate so they can lodge their claim with an employment tribunal. It is at this point they are required to pay fees – an initial fee to issue a claim and an additional hearing fee if the claim reaches tribunal stage.

It is here that accusations of a justice barrier arise. Recent research by Citizens Advice reviewed just under 200 cases in which an employee decided not to bring a claim against their employer due to financial considerations – it found that seven out of 10 of the cases were potentially successful.

Since the introduction of fees, figures by the TUC show a 71% decrease in cases received by the tribunals service; most affected are cases of sex discrimination, down by 91% and unfair dismissal and unfair deduction from wages (both at 74%).

Are these figures a clear indicator that employees aren’t willing to foot a huge bill in order to access justice? Many, including politicians and legal experts seem to be answering with an overwhelming yes.

Chuka Umunna, Shadow Business Secretary and himself previously a solicitor specialising in employment law, is a key advocate for this argued wall to justice.

In a speech earlier this month, Umunna claimed that if Labour were elected in 2015 they would completely overhaul the Employment Tribunal system and scrap the fees altogether.

This argument hasn’t escaped the scrutiny of the courts. In the recent case of Unison v Lord Chancellor and EHRC [2014] it was claimed that a requirement to pay fees as a condition of access to an Employment Tribunal was unlawful.

In the case, Unison claimed that the Fee Order contradicted Art 19 TEU, “Member States shall provide sufficient remedies to ensure effective legal protection” as “the procedural requirements for domestic actions must not make it virtually impossible or excessively difficult to exercise rights conferred by EU law” (Levez v T H Jennings [1998]).

This is a hugely important question as many claims put forward by employees are in relation to discrimination; it is a general principle of EU law that Member States should use all available means to prevent discrimination, including by enforcement of the right to an effective remedy before a tribunal (see both Art 19 TEU but also in Art 47 of the Charter of Fundamental Rights.)

Although Moses LJ and Irwin J seemed somewhat convinced by the arguments put forward by Unison, the case was dismissed due to lack of substantive evidence.

As the case was brought before the High Court just months after the changes came into effect, Unison could only put forward hypothetical situations in which employees would be affected by financial constraints; they created various characters and presented how these people could be influenced by the fees but could not prove anything because their examples were fictional.

The situation remains open for debate. It is clear that the old system was expensive, slow and put too much onus on the employer but recent statistics reveal that many employees face undeniable limits to accessing justice. Rob Wall, the CBI’s head of employment policy has noted that the introduction of fees has acted as a necessary filter for unnecessary claims yet “we have never called for the level of fees the government has introduced.”

At the end of September the Court of Appeal will hear Unison v Lord Chancellor and EHRC in which the TUC statistics will play an undeniably substantial role in Unison’s appeal.

Whilst the current challenges before the courts are unlikely to cause a major upset, given the current political landscape it’s very difficult to predict what the future holds for the Tribunals system.

What is clear is that if we do have a change in government and Labour have a stake in the new government, we will face yet another major overhaul of the system which will tilt the balance back in favour of employees.