George Osborne announced the proposed introduction of fees at the Conservative party conference in October 2011, saying: ‘We are ending the one-way bet against small business.’ When the fees were set by the Ministry of Justice (MoJ) in July 2012, the justification for them had shifted from a measure to assist small businesses. The explanation for the new policy given by the then minister, Jonathan Djanogly, was that it was ‘not fair on the taxpayer’ to foot the entire £84m bill for HM Courts and Tribunals Service and that the fees would be ‘tailored’ to encourage mediation in employment disputes.

LAG believes that the fees have been set at levels completely disproportionate to the value of the claims pursued before ETs. For usually simple claims, such as for unpaid wages, an issue fee of £160 and a hearing fee of £230 will be charged. Such claims often amount to a few hundred pounds or less. A fee of £600 will be levied for mediation by a judge and, in what are called level 2 claims, such as unfair dismissal, discrimination and equal pay claims, an issue fee of £250 and a hearing fee of £950 will be charged. The average award in unfair dismissal cases is only around £4,500. Many employees get much less than this, and so fees of £1,200 will be a major disincentive to bringing claims.

While the government argues that low-income employees will be able to take advantage of fee remission, we have yet to see the full details of this scheme. The short deadline of usually three months to bring an ET claim will work against employees because many applicants might be excluded from applying for fee remission if they have received severance payments from their former employers. For example, employees who receive the maximum payment of 12 weeks’ pay in lieu of notice could be deemed to have an income for the entire period in which they can bring a claim for unfair dismissal. Many applicants will have a partner who also works and provides a household income, which is likely to exclude the applicant from the fee remission scheme.

Even if employees find the money to pay the fees and are successful in bringing a claim against their former employer, they have no guarantee that they will be able to recover the fees they have had to pay out. The ET can order the fees to be paid by the employer at the conclusion of the case but, since nearly half of successful claimants currently struggle to recover the award a tribunal makes, LAG suspects that they are equally unlikely to get their fees paid by the losing employer. Many employers routinely ignore tribunal judgments or dodge them by hiding behind limited liability to avoid former employee and other debts. It seems to LAG that the state is happy to take money from applicants to subsidise the Courts and Tribunals Service, but is unconcerned about employers avoiding justice.

Citizens Advice has published a succession of reports, Empty justice (2004), Hollow victories (2005) and Justice denied (2008), which show that many people awarded compensation from their former employers never receive the money. The last government responded to this with its own research, commissioned by the MoJ and reported in 2009, which showed that the number of tribunal decisions avoided by employers was worse than the one in ten which Citizens Advice had feared.1Lorna Adams, Ashley Moore, Katie Gore and Joni Browne, IFF Research Ltd, Research into enforcement of employment tribunal awards in England and Wales, MoJ Research Series 9/09, May 2009. The researchers interviewed over 1,000 ET applicants who had been successful in their claims before a tribunal. The interviews were conducted after the 42-day period in which the awards were due to be paid. They found that 39 per cent had received nothing and eight per cent of awards had only been partially paid. Larger awards were more likely to go unpaid, with 70 per cent of smaller awards up to £499 being paid.

LAG believes that the research by both Citizens Advice and the MoJ shows that the main problem the justice system faces regarding employment rights is the many employers who ignore employment law and avoid the consequences of doing so. The introduction of fees for ETs will lead to more injustice for employees trying to enforce their rights and for the majority of employers who abide by the law but have to compete against others who do not.