ET fees: We have to stop chasing unicorns in Fiscal La La Land

Last Friday, and over the weekend, I took the rare step of publicly disagreeing – via Twitter – with a leading #ukemplaw practitioner. It’s not the first time I have been so impertinent, but I do try not to do it too often. Well, I like to feel safe when I walk down the street.

Camilla Palmer, formerly of Leigh Day and now of YESS, had posted an on-point blog post in response to the latest set of quarterly ET statistics. After noting that “we already have an increasingly insecure labour market with zero-hours contracts, pay freezes and huge inequalities” and that “employers will become increasingly complacent about obeying employment laws when previously they would have done so for fear of ending up in a tribunal,” Camilla concluded “what use are employment rights without remedies?”

What use indeed. As predicted by many, the ET fees regime introduced in July 2013 has proven to be a fabulous gift to dinosaur and rogue employers, who can now mistreat and exploit low paid workers with near impunity. Camilla and I agree that remedying this is the single most important employment relations policy issue for the next government. But I had to disagree with Camilla’s assertion that “there is no indication from any party that fees will be changed [after May 2015].”

In fact, both Labour and the Liberal Democrats have indicated clearly that they would change the fees regime, should the electorate give them the chance to do so. In September, shadow business secretary Chuka Umunna became the first shadow minister to spell out the policy agreed a few weeks earlier by the party’s National Policy Forum: under a Labour government, the current fees regime would be scrapped and replaced by one ensuring that “affordability” is not a barrier to justice.

At the very least, that implies a substantial reduction in the level of claimant fees – quite possibly to a nominal level. And, at their party conference in October, the Liberal Democrats adopted a policy paper noting that the “high level of tribunal fees presents too much of a barrier” to justice – a mind-boggling statement suggesting the Liberal Democrats think it OK to have some barrier to justice, just not too much. The policy paper commits the party to a review of the fees regime, with a view to lowering the level of the fees, if re-elected to government in May. (Yes, I know).

However, to Camilla and many others – including the TUC – that is not sufficient. They want outright abolition of the fees regime, and will not brook arguing for anything less. To my mind, that is an honourable position. But it’s also chasing a unicorn in what FlipChartRick calls Fiscal La La Land. (And it’s worth noting that, according to Marxist economist and cook Chris Dillow, “four-fifths of  macroeconomists agree with Rick.”)

There are two, very simple reasons why outright abolition will simply not happen, whoever’s installed in government in May. The first is that the CBI and other employer lobby groups would not swallow outright abolition. And, if you doubt the influence of such groups, note how Chuka Umunna and Rachel Reeves have, in the face of CBI protest, been energetically rowing back on Ed Miliband’s pathetically modest conference pledge to increase the NMW rate to at least £8 per hour by 2020.

The second reason is money. It is now clear that outright abolition of the fees regime would cost new ministers at least £12 million, and possibly as much as £35 million, per year in lost fee income and lost operational cost savings from the dramatic fall in cases, which would presumably reverse. (For an explanation of why the price tag ranges from £12m to £35m, see here).

Now, £12 million per year is undeniably a piddling sum, when set against overall government expenditure. But with the spending plans of all three main parties so tight that many are predicting the bankruptcy of local authorities and even police forces soon after May 2015 if something does not give, it’s £12 million per year that newly-installed justice ministers would either have to find from somewhere else – the legal aid budget? – or replace with income from an alternative fees regime, perhaps based on nominal claimant and respondent fees, that does not significantly impede access to justice. No new Chancellor of the Exchequer is going to say ‘oh, no worries, here’s an extra £60 million for the next five years, I’ll find a way to cover it eventually, maybe by tackling corporation tax avoidance.’

Which presents those of us who want to see the restoration of workers’ access to justice with a stark but simple choice. We can continue to chase unicorns in Fiscal La La Land, and leave the inevitable creation of that alternative fees regime to the politicians and their influential friends in the corporate world (who will not want respondent fees, for example). Or we can accept the reality of public spending from May 2015 to at least 2020, and try to shape that alternative fees regime ourselves.

That said, I count myself among what Camilla pessimistically describes as “the few holding their breath” for the judgment in UNISON’s (second) JR of the fees regime. Should that go UNISON’s way, as I believe it will, even BIS employment relations minister Jo Swinson might now be willing to pitch in against the Ministry of Injustice in terms of shaping the current government’s response. At the weekend, Ms Swinson finally broke her astonishing 13-month public silence on the impact of the fees regime by revealing to the Independent that she has written to justice minister Shailesh Vara, demanding that the Ministry’s long-promised post-implementation review of the fees regime be conducted “without further delay, particularly given the alarming drop in sex discrimination claims.”

I know that my regular readers – hello Mum! hello Dad! – will be feeling a little disgruntled at the lack of charts in this post, so here is one showing that alarming drop in sex discrimination claims.


Postscript (16 December): Camilla’s colleagues at YESS clearly feel that I’ve been somewhat unfair to Camilla, and have posted this riposte, which I urge you to read. I can only say that I’m not questioning anyone’s integrity or commitment to the cause of protecting workers’ access to justice.

2 thoughts on “ET fees: We have to stop chasing unicorns in Fiscal La La Land

  1. I think (and this is not a phrase I have used often in my sheltered northern life) that I agree with Camilla.
    I don’t believe, given the almost universal loathing of the current fees regime, that it’s unrealistic to seek to return to a state of affairs that existed barely 18 months ago, while a review looks at and seeks consensus on a fair system. Trade unionists like myself would certainly argue in such a review for a system which contains no or nominal fees only. Off to feed my unicorn now.

  2. Pingback: Employment Tribunal Fees and What You Can Do About Them - Employment Law Advocates

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