A four-year policy of charging workers up to £1,200 to take law-breaking bosses to court was based on misleading data, a study has found, meaning thousands of people may have wrongly missed out on redress for breaches of employment rights.
The introduction of employment tribunal fees in 2013 coincided with rising use of zero-hours contracts and gig-economy arrangements, which sparked concern that workers were being paid below minimum wage and missing holiday and sick pay rights.
The policy resulted in a 70% slump in claims and Matt Hancock, the then enterprise minister in David Cameron’s government, which introduced the fees, said rising claims were like “Japanese knotweed … squeezing the life and energy from Britain’s wealth creators”.
He said: “Unscrupulous workers caused havoc by inundating companies with unfounded claims.”
But the number of cases was overestimated by about 70%, according to a study by a Cardiff University academic, Jonathan Mace.
Official figures in 2013 recorded 190,000 new claims, but the real number of claimants was 110,000 or fewer, according to Mace. Some claims had to be renewed every three months, leading to the same person’s claim being counted four times in a year, Mace told the British Sociological Association conference. Thus, it was “ghost” rather than vexatious claims that drove an increase.
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“The statistics do not validate some of the policy and political interpretations that have been based on them,” Mace said.
Nigel Mackay, a partner in employment law at Leigh Day who has represented gig economy workers in subsequent successful employment rights appeals, said the fees had “a chilling effect” on attempts to use the courts to protect workers from abuse during that period.
The fees were introduced amid a sharp rise in the number of people on zero-hour contracts by employers such as Sports Direct and the growth of gig economy work through Uber and parcel companies such as Hermes PD, which did not provide worker rights or a guaranteed minimum wage.
Mackay said the drop in claims particularly affected people with “low-value but entirely merited claims who were deterred by the fees”.
“They were the sort of people that would be deterred from making claims about not being paid the minimum wage, while from the employer side they were happy with people being deterred.”
A government review of the charging policy in 2017 conceded that 3,000 to 8,000 people had not been able to resolve disputes as a result of being priced out and the fall in claims was much greater than ministers anticipated, with a particular impact on discrimination claims.
The charges were abolished in 2017 after the supreme court ruled them illegal after a challenge by the trade union Unison, and the average number of claims against employers made each month rose from 1,407 to 3,047. People who paid fees were entitled to apply for a refund. But last summer, it was reported that the government was considering options for reintroducing charging.
The Ministry of Justice said no decision had been taken to introduce new fees and it disputed Mace’s suggestion of “ghost” claims. It said its figures made clear that they included cases that were resubmitted but said it was not possible to accurately estimate how many new claims were in fact resubmitted claims.
