Changes to fee remissions- What is the impact for employers?

February 14, 2017

For a long time, Employers felt that employment law was significantly weighted in favour of employees. In some respects, we can understand why Employers would feel this way, especially when historically the first notification they had of an Employment Tribunal claim being issued by one of their employees was when a letter from the Tribunal landed on their desk.

From that moment; the clock was ticking to submit a response to the claim, which invariably meant that they were having to pay for legal advice to assist with the preparation of their response (which they hadn’t expected or budgeted for!) This was made worse by the fact that they knew that the employee was unrepresented, and therefore bringing the claim was not costing them a penny!

However, in 2013 and 2014 there was quite a big shift in employment law in favour of employers. Firstly 2013 saw the introduction of fees for proceedings issued in the Employment Tribunals and the Employment Appeal Tribunal, and in 2014, ACAS Early Conciliation was introduced.

The Ministry of Justice has finally published the results of its review of the introduction of fees in the employment tribunal and we have noted some of the important bits!

The Review and Consultation Document can be found here: (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/587649/Review-of-introduction-of-fees-in-employment-tribunals.pdf)

After considering all of the evidence the Government considers that the main objectives of the fee regime have been met, but acknowledges that the review has brought to light some matters of concern which cannot be ignored and need addressing.

The Government has acknowledged in its report that;

  1. The fall in claims is ‘sharp, significant and sustained’ and much greater than originally estimated;
  2. people may have been discouraged from making claims, but asserts that there is no conclusive evidence that they are prevented from doing so;
  3. more people have referred their disputes to Acas’s conciliation service, but that there is also some evidence that some people who have been unable to resolve their disputes through conciliation have been discouraged from bringing a formal ET claim because of the requirement to pay a fee.
  4. There is group (which Acas estimates to be between 3,000 and 8,000 people) who were unable to resolve their disputes through conciliation, but who did not go on to issue proceedings because they said that they could not afford to pay. The Government however does not agree that this necessarily means that those people could not realistically afford to pay the fee. It may mean, for example, that paying the fee might involve having to reduce other areas of non-essential spending; or that they were unaware of the help available, thought they might not qualify for help; or they may have been unaware of the Lord Chancellor’s exceptional power to remit fees.

The Government has decided to take action to address these concerns by:

  • raising awareness of the fee remission scheme and to make it simpler to apply;
  • extending access to the support available. The Government is proposing to set the gross monthly income threshold for a fee remission at broadly the level of someone earning the National Living Wage (£7.20). These proposals are designed to help those on low incomes and who are therefore more likely to struggle to pay the fees.
  • The Government has also decided that it is not appropriate to charge a fee for three types of proceedings in the ETs which relate to payments from the National Insurance Fund, because conciliation is rarely a realistic option in these types of case, and they often involve employers who are insolvent and are therefore unlikely to be able to satisfy an order for the fee to be reimbursed.

Most people would agree that it is better for parties to try to resolve disputes without going to the tribunal and the Government considers that its proposals maintain the financial discipline that fees bring to tribunal proceedings, providing people with an incentive to consider alternatives such as Acas’s conciliation service. The proposed changes are unlikely to have a significant impact on the number of claims which are being issued by employees. In any event employers still have the protection of ACAS Early Conciliation, so that should limit the times where a claim comes as a big surprise.

A consultation on the changes runs until 14th March 2017, and the Judicial Review challenge of the fee regime brought by the Trade Union UNISON is due to be heard by the Supreme Court on 27th and 28th March 2017.  Therefore, it is likely that we will be blogging on this again in the near future!

Need expert employment law advice? Call us on 0115 8389719 or email us enquires@hancockslegal.com

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