ET Fees and Early Conciliation

According to statistics from the Ministry of Justice published last week, the number of ET claims issued since the introduction of issue fees has fallen off a cliff.  In the quarter October to December 2013 there were 9,801 claims issued, which was 79% fewer than the corresponding period in 2012 and 75% less than the previous quarter.  ET fees were introduced on 29th July 2013 and the level of fee depends on the type of case – for unlawful deduction of wages claims (for example) the issue fee is £160 whereas for unfair dismissal and discrimination the fee is £250. There is a fees remission system which is complex and under review.  Furthermore, there are also additional fees for taking a claim to a final hearing (£230/ £950) meaning that in an unfair dismissal claim total Tribunal fees might be as much as £1200 to enable an employee (who may well be out of work) to get the claim before an Employment Judge for a decision.

The figures released by the MoJ make light of this drop, suggesting that the trend in new claims has been declining over the last few years.  That is true, but the decline has been gradual, until this last quarter when the fall has been dramatic.  It is hard to think that there has been another cause for the drop than the introduction of fees and it suggests that Claimants are being priced out of the ET system.  Unauthorised deduction and sex discrimination cases seem to have fare particularly badly, although all types of ET claim are significantly down. UNISON has suggested that the fee regime affects women disproportionately and thus is indirectly discriminatory: its’ Judicial review challenge to the introduction of fees failed on this point but when a few more quarters of data have come in a more informed view may be possible.

Assuming for the moment that ET fees are the driver of this reduction in claims, how does this affect the introduction of pre-claim conciliation via ACAS that will come into existence from next month?  The new regime, which has been described as “seismic”, will require all Claimants after 6th May 2014 (but only those who elect from 6th April for that month) to submit details of their claims to ACAS, who will then offer a form of alternative dispute resolution called early conciliation, before they can issue their claims at an Employment Tribunal.  This will stop the clock ticking on the limitation period for issuing claims (usually three months).  If one of the parties refuses or the process fails then the claim can proceed once ACAS has provided a certificate.   Will this herald a new era of non-adversarial dispute resolution in the workplace as the Chief Executive of ACAS Anne Sharp stated in her interview with the Law Society Gazette,or just be another procedural hurdle for a financially hard pressed employee to overcome?

In other words, what will be the combined effect of ET fees and early conciliation? If claimants can’t afford to litigate then employers may take the view that early conciliation is not worth taking seriously because the employee won’t be able to issue the claim and will then have to resign or drop their issues, thus earning a quick and easy victory. It will be crucial for the success of early conciliation that it is seen to be a credible system for resolving disputes by both sides otherwise it will  go the way of the statutory dispute regulations that were  finally put out of their (and our) misery in 2009.

On the one hand, of course, an employer isn’t to know that a particular employee can’t afford to litigate, but it might certainly cause the employer to dig in and wait to see what the employee does before offering to negotiate seriously or settle. Tribunal fees are not automatically refundable even if the Claimant wins, although the Tribunal has discretion to order repayment.  A hard up employee may simply be unable to cough up an issue and hearing fee of £1200 in order to get to a final hearing. Judicial mediation of issue claims (i.e. ones that have been issued and before the Tribunal) carries a fee of £600, payable by the Respondent, which rather suggests employers won’t be rushing to try and mediate ongoing disputes.    Under the current system the risk is all on the employee and many will refuse to take that risk, meaning many injustices will go unchallenged.  Early conciliations might become a forum for employers not so much to conciliate a dispute but to force employees into unattractive settlements because they have no other option.  That might ultimately lead to early conciliation being seen as a mechanism weighted too much in favour of the employer and an opportunity to find a fair system of alternative dispute resolution that can rescue the employment relationship before it becomes bogged down in a bitter legal argument will have been lost.

On Saturday I posted a tweet on this subject and it received some interesting responses;

Michael Scutt, Employment Solicitor 

Employment solicitor with Crane and Staples, Welwyn Garden City, Hertfordshire. Blogger & writer. I like cycling, cricket, football and history.