Last month on this blog, I set out my utterly brilliant six-point plan for the next Labour government to ‘protect vulnerable workers’, and promised I would be expanding on each point in due course.
Today I’m going to focus on the need to ‘restore access to the employment tribunal system’ by replacing the Coalition Government’s fees regime, now set to come into force on 29 July.
Whilst the introduction of fees for employment tribunal (ET) claims is deeply regrettable, it is unrealistic to expect any Labour government elected in 2015 to simply abolish the fees regime.
It is therefore necessary to devise an alternative regime: one capable of generating the same total fee income of some £10 million per year, but without creating a significant barrier to justice.
I have previously outlined just such an alternative ET fees regime, based on (a) an ‘at fault’ fee for losing respondent employers, who by definition have caused the ET system to be used, and are the reason the ET system exists; and (b) a nominal, flat-rate issue fee for claimants. Under this model, my proposed flat-rate issue fee would be paid by all claimants, including each claimant in a multiple claim case.
Such multiple claim cases can involve hundreds or even thousands of workers, but the ET system may need to determine only one ‘lead’ case. And, as the Ministry of Justice has noted, ‘every person within a multiple claim ultimately gains the same benefit as an individual bringing a single claim. If the lead case succeeds, then all claimants covered by that lead case succeed’. So, charging a fee to each claimant in a multiple claim case would be equitable. It would also be (relatively) simple to administer, and would not be complicated by the merging and splitting of cases by tribunals for the purposes of hearing.
However, under lobbying by the TUC and trade unions, who bring many of the 5-6,000 multiple claim cases each year, ministers have ignored their own logic and settled on a sliding scale of fees for multiple claim cases, under which the maximum fee payable will be just six times the fee for single claims.
So, in an ‘equal pay’ multiple claim case brought by a trade union on behalf of 2,000 workers, each worker would pay just £3.60 in fees, whilst a single, unrepresented worker bringing a claim for unfair dismissal would pay £1,200. That is self-evidently unfair.
However, as multiple claim cases ‘provide operational efficiencies’, it would be fair to set a lower flat-rate issue fee for claimants in multiple claim cases. So, I suggest a £60 flat-rate issue fee for single claimants, and a £40 fee for claimants in a multiple claim case.
Using the ‘base case’ figures for ‘steady state’ claims and disposals set out in paragraphs 3.2 – 3.15 of the impact assessment that accompanied the Ministry of Justice’s original consultation paper, that would raise £4.7 million from the 98,550 claimants each year (37,800 single claimants, and 60,750 claimants within 2,250 multiple claim cases). And a flat-rate ‘at fault’ fee of £600 would raise £5.1 million from the 8,500 employers who lose at a hearing (i.e. having failed to settle the claim prior to the hearing), or by a default judgment.
Whilst the TUC and (some) trade unions remain stubbornly opposed to the idea of a flat-rate fee for each claimant in a multiple claim cases, their position is not an easy one to understand. Because the maths shows that most union members bringing a multiple claim case would be substantially better off under my alternative fees regime than they will be under the regime set to come into force on 29 July.
For example, in an ‘equal pay’ multiple claim case brought by a trade union on behalf of ten workers, each claimant will pay £360 under the Coalition’s fees regime, but would pay only £40 under my alternative fees regime. Worse still, where there are only four claimants in the union’s multiple claim case – the median number of claimants in multiple claim cases – each will pay £600 from 29 July. (The vast majority of multiple claim cases (85%) involve fewer than ten claimants).
Only in the very small number of very large multiple claim cases will union members be better off under the Coalition’s fees regime than they would be under my alternative fees regime. And, even then, the difference is relatively insignificant. In an ‘equal pay’ multiple claim case brought by a union on behalf of 250 workers, for example, each worker will pay £28.80 from 29 July, but would pay only £11.20 more under my alternative fees regime.
To my mind – and I write as both a union and a Labour Party member – that is a very small price for the union movement to pay to ensure access to justice for the vast majority of low paid workers who can only dream of the benefits and protection offered by trade union membership.
Richard Dunstan is a policy wonk who has worked for Citizens Advice, the National Audit Office, the Law Society, and Amnesty International UK.