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The Impact of Tribunal Fees and ACAS Early Conciliation

Jul 15th, 2016

Kate Hindmarch, Consultant Solicitor

In recent years most employers will have seen a stark reduction in the number of Employment Tribunal claims being brought by their employees. This is largely attributed to the impact of Employment Tribunal fees, which were introduced by the government in July 2013 to relieve the pressure on Employment Tribunals and increase efficiency in the Tribunal system. ACAS Early Conciliation, which was introduced in May 2014 as an ancillary measure to Tribunal fees, has also had an impact.

A recent research paper by ACAS and their latest statistics published in early July 2016, have set out the full effect of Early Conciliation. Meanwhile, the House of Commons Justice Committee has published its scathing review of the impact of fees in the Courts and Tribunals. So, what do the reports say, and what does this mean for employers? 

ACAS Report and Statistics 

Since May 2014, all prospective claimants have been required to instigate the Early Conciliation process, in an attempt to settle the claim and avoid Employment Tribunal proceedings. If the parties do not reach an agreement, ACAS will issue an Early Conciliation Certificate and number, which the claimant must then include in their claim form to the Tribunal. Even then, ACAS will continue to offer a conciliation service, right up to the point a judgment is made. 

ACAS’ latest report and statistics confirm that between April 2015 and March 2016, ACAS has dealt with 92,000 early conciliation cases – an increase of around 1,000 from the previous year. 

ACAS has previously reported that only 10.5% of employees and 11.5% of employers refused the offer to participate in ACAS Early Conciliation, meaning that about 90% overall agree to engage in Early Conciliation. ACAS’ current figures also suggest that the number of employers requesting early conciliation has increased by nearly 60% from the previous year. 

The latest statistics show that 71% of cases notified to ACAS or issued did not proceed to a hearing – which is good news for employers. In particular:

  • 31% of cases settled at Early Conciliation

  • 22% of cases settled at after a claim had been issued

  • in 17% of cases, claimants did not proceed to a hearing; and

  • in 1% of cases, the claimant indicated that ACAS conciliation after the claim was issues was an important factor in their decision to not proceed to a hearing.

Of those who withdrew their claim, 27% reported that it was due to low prospects of success or because they considered it to be a waste of time and 17% found the process too stressful. Just over a fifth of cases reached a full hearing, with the most frequently cited reason being the employer’s unwillingness to negotiate.

The increase in ACAS notifications suggests that workplace disputes are just as widespread as ever, however, as so many claims settle during the Early Conciliation stage, this suggests that the process has had the desired impact in successfully resolving workplace disputes before a Tribunal claim is issued.

Research also suggests a good rate of satisfaction amongst both employers and employees, with 92% of employers and a similar percentage of claimants (87%) saying they would use ACAS conciliation again.

The government has been keen to emphasise the importance of ACAS, and suggested to the House of Commons Justice Committee that the success of Early Conciliation may account for the drop in the number of claims being issued. However, the Justice Committee has dismissed that suggestion as “superficial” in its recent review into the fees being charged by Courts and Tribunals.

Indeed, ACAS’ own report confirmed that fees continued to be a significant deterrent for individuals making a claim in the Employment Tribunals, with 20% of claimants reporting that they did not proceed with their claim because they found the fees to be off putting.

The Committee found that

  • fees "have had a significant adverse impact on access to justice for meritorious claims"; and
  • the difference in fees for 'type A' and 'type B' claims does not properly reflect the complexity or length of cases.

The Report was also very critical of the government's failure to publish the result of its own post-implementation review of fees that was launched on 11 June 2015.

The Justice Committee has made a number of substantial recommendations for revising the Employment Tribunal Fee system to improve access to justice, including a recommendation that the current level of Employment Tribunal fees should be substantially reduced and that the remission system should be overhauled, with only one application needed (to cover both issue and hearing fees).

It remains to be seen whether the government will now publish its own report into Tribunal Fees, or at least the factual information it has collated. However, the pressure is now on to follow the Justice Committee’s recommendation, with some commentators suggesting a fee of £50 would be appropriate. This would inevitably restore access to justice for some prospective claimants, but would be bad news for employers, who have managed to avoid Tribunal litigation to date, by waiting for employees to “put their money where their mouth is”.

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Kate Hindmarch

Consultant Solicitor

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