Tribunal fees “a clear violation” of UK & EU law, says Oxford University report

23 March 2017 Oxford University experts in economics, Associate Professor Abi Adams, and the law, Associate Professor Jeremias Prassl, have described the Coalition government's introduction of employment tribunal fees as "a clear violation" of UK and EU law.

23 Mar 2017| News

23 March 2017

Oxford University experts in economics, Associate Professor Abi Adams, and the law, Associate Professor Jeremias Prassl, have described the Coalition government’s introduction of employment tribunal fees as “a clear violation” of UK and EU law.

In an article to be published in the Modern Law Review journal on Monday March 27 2017, the academics describe the policy as “disproportionate” and claim it illegally denies workers access to justice.

In an analysis of government data, the experts discovered that for up to half of all claimants with a good chance of succeeding at tribunal, the expense of bringing their case outweighs the level of the expected payout, meaning the worker would lose money by taking unscrupulous employers to task.

Dr Adams explained: “The average award for some employment claims, such as unauthorised deduction from wages, is as low as £600. With fees ranging from £390 to £1,200, it does not make economic sense for many claimants to enforce their rights.”

What’s more, the academics found that tribunal fees may be having the opposite impact of the government’s reported aims: to lower the cost to the taxpayer of the tribunal system, to encourage early settlement of cases, and to deter vexatious claims.

Instead, the few claimants who are bringing vexatious claims were found to be the least likely to be deterred by the fees, while employers are disincentivised from making a settlement because they know there is a high chance that workers will simply give in rather than pay the cost of taking their case to court.

The number of claims going to tribunal dropped by 70% within the first year of the fees being introduced, and the cases hardest hit have been those involving low-income, zero-hours workers, who are often expecting lower payouts that will not cover their costs, the report suggests.

Dr Prassl said: “The Employment Tribunal fees are a clear denial of access to the courts, which has been a cornerstone of our justice system since Magna Carta. The conclusions of the Prime Minister’s Taylor Review into Employment Rights will be meaningless without a credible way for workers to seek justice.”

The Institute of Employment Rights agrees that without the ability to enforce their rights at tribunal, workers can not simply be “empowered” to speak up against unscrupulous employers, as Taylor’s preliminary recommendations – which largely revolve around increasing workers’ awareness of their rights – seem to suggest.

However, we would add that it is not enough to simply remove tribunal fees, as the current system of placing the onus on workers to police their own rights falls short of effective enforcement. Individual workers have significantly less power, and access to significantly fewer legal resources, than their employers. We argue that the promotion of collective bargaining at both sectoral and enterprise levels is necessary to allow workers to negotiate for fair pay and conditions, as organising in trade unions is the best way to equalise the imbalance of power between employers and their staff. We also argue that an independent Labour Inspectorate should be established to ensure employers are following both the law and any collective agreements relevant to them.

Read more about the proposals in our Manifesto for Labour Law – 25 recommendations, the principles of which have been adopted by the Labour Party.

The conclusions of the Modern Law Review report support Unison’s ongoing battle against the implementation of employment tribunal fees, which will be heard in the Supreme Court on Monday March 27 2017. Referring to the union’s judicial review, Dr Prassl said: “The lower courts’ approach was inappropriately narrow in its interpretation of English and European law: a right without a remedy is of little value”.