In March 2014, we reported a dramatic 79% drop in Employment Tribunal claims (see e-brief) following the introduction of Employment Tribunal fees on 29 July 2013. Pending further official Tribunal statistics, due in June, there have been suggestions that delays within the fee remission system are, at least in part, the explanation for this dramatic drop.
Remission and delays: our experience
Certainly, in a number of claims being dealt with by Eversheds, the Tribunal claim forms have been significantly delayed in reaching the respondent.
In one such example, a client received a claim form in March 2014 which had taken over six months, since being lodged in September 2013, to get through the Tribunal system. The claim form was date stamped 16 September 2013, but it is clear that the claimant applied for remission. A Notice to Pay a fee was issued on 21 February, indicating that the remission application took from September to February to process.
In another case, a claim form was received by the respondent in March. The claimant was dismissed last May and had submitted his ET1 in time.
And in a final example, the claimant was dismissed in July 2013 and submitted his claim on 4 October 2013. He applied for a fee remission. The claim was sent out by the Tribunal to the respondent on 11 February 2014.
The speed of the remission application process is obviously noteworthy for employers, for whom, it seems from our recent experience, the period of uncertainty over if, or when, an employee might raise a claim has greatly increased. Efficiency over that process may well be improving now that it has been up and running for several months. But can delays of this kind, whilst remission applications are processed, be a possible explanation for the startling 79% drop in claims actually registered at the Employment Tribunals?
What do the remission statistics reveal?
Provisional statistics from HM Court & Tribunals Service indicate that a total of 2500 paper remission applications were received for the period 29 July to 31 December 2013.
Of those, 600 applications were granted, and 1800 were rejected. This means 24% of applicants made a successful remission application, in whole or in part.
What these statistics also reveal is a basis for certain other calculations. For example, if we seek to minimise the fall in the number of claims lodged in the three months to December 2013, by assuming that all the 2500 fee remission applications were made in that period, that still results in a 73% drop in the number of Tribunal claims started.
The biggest drop in claims has been in multiple cases – claims brought on behalf of large groups of employees, typically for equal pay or for higher holiday pay. The fall in claims numbers is less significant in relation to claims by individuals, typically for unfair dismissal, discrimination or other wrongs they have suffered at work as individuals. There was a 64% drop in such individual claims registered by Tribunals in the quarter to December 2013 compared with the same period in the previous year before the introduction of fees. Again, taking into account the published statistics, to minimise the fall it can be assumed that all the 2500 applications for remission of fees were made in those three months and that they all related to single claimants. That still suggests a reduction in individual claims of approximately 45%.
More statistics will emerge over the coming months and, as indicated above, the next official Tribunal figures are due to be released next month.
We understand that a Government review is to be conducted over the summer and autumn, which will look at issues such as: whether the new system, in particular the fees regime, has created an unacceptable barrier to justice; the extent to which cases are being diverted into other courts (such as small claims courts); and the impact of Acas early conciliation (see e-brief). The Government’s commitment to review the system was a significant factor when they successfully defended Unison’s legal challenge to the introduction of fees.
We further understand that leave to appeal has been granted to Unison in respect of their legal challenge. In that challenge, the High Court found that, without clearer statistics, it was impossible to know whether the fee regime was operating to the disadvantage of certain groups of employees – particularly those complaining of discrimination at work (see e-brief).
The recently published remission statistics now appear to demonstrate that thousands are being deterred from bringing Employment Tribunal claims despite fee remission being available.
Assuming the figures are correct, we can be pretty certain that the number of individual claims has been more than halved by the introduction of fees. This is in stark contrast to the estimates made in the Government consultation papers about the introduction of Employment Tribunal fees and the remission system. It may be that some potential claimants who would benefit from remission are being put off by the paperwork. However, the fact remains that the imposition of fees combined with the application process to obtain remission is deterring a very large number of potential Employment Tribunal claimants.
Although further research will reveal the detail, it is likely that the biggest fall in claim numbers will have been in claims for relatively small amounts of money. Although the Employment Tribunal fees for such claims are lower, it will still seem to be high risk for many employees to pay a £390 fee, without certainty of recovering their losses. Many employers will have experienced first hand a dramatic drop in employees raising claims. Whilst they will no doubt welcome this reduction, unless the statistics suggest significant turn around, there is every possibility this will be short-lived and the Government will either decide adjustments need to be made or will have its hand forced to do so.