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10 Jun 2014

Employment

Employment Tribunal Fees Introduced as of 29th July 2013

Over the last 2 years, the Government has been considering the introduction of fees for commencing a claim in the Employment Tribunal or submitting an appeal to the Employment Appeals Tribunal (EAT). The issue has been widely discussed and has been the subject of comprehensive Consultation Papers addressing how such a system would work in practice and the pros and cons of its implementation.

On 29th May 2013, the Ministry of Justice issued a press release confirming that as of the 29th July 2013 fees will be payable by those wishing to bring a claim in the Employment Tribunal. Subject to confirmation and any necessary Parliamentary approvals, Employment Tribunal claims will be categorised as either a Level 1 or Level 2 claim and will attract a fee for both the issuing of the claim and for the Hearing.

Level 1 claims will include claims for unpaid wages, breach of contract, equal pay, holiday pay and redundancy pay. The fee for submitting a claim in this category is proposed to be £160.00 with a Hearing fee of £230.00.

Level 2 claims will include those for unfair dismissal, discrimination and detriment. The fee for submitting a Level 2 claim is proposed to be £250.00 and a Hearing fee of £950.00.

Should a Claimant wish to bring claims in both Level 1 and Level 2, for example, a wages (Level 1) and unfair dismissal (Level 2) claim, the fee payable will relate to the highest level claim. The Claimant will therefore pay a single fee at the Level 2 rate.

Under the new fee scheme, Interim Applications will also attract a fee which will vary according to the type of Application being made and will be payable by the party making the Application. For example, a fee of £100.00 will be payable on an Application to Review a Default Judgment in either a Level 1 or 2 claim.

The submission of an appeal to the EAT will also incur a charge of £400.00 and a Hearing fee of £1,200.00.

For those Claimants with insufficient income to pay the relevant fees, an application can be made for fee exemption demonstrating their inability to pay. Should the application be successful, both the issue and the hearing fee will be waived in their entirety and the Claim permitted to continue without any contribution from the applicant whatsoever.

In its December 2011 Consultation Paper, the Government explained that its reasons for introducing these fees were threefold. Firstly, to place the Employment Tribunal on a similar footing as the Civil Courts who had been charging fees to litigants for many years. Secondly, to transfer the significant cost, some £84 million, of running the Employment Tribunals from the taxpayer to those actually using the system. The Government rationale is that those who are able to contribute should do so, particularly as the taxpayer does and shall continue to fund ACAS conciliation which will remain free to Employment Tribunal users. Finally, it is hoped that the introduction of fees will encourage those involved in Employment Tribunals to attempt to resolve their differences through other means (such as workplace mediation) and promote early settlement.

While the Government has provided legitimate reasons for the introduction of Employment Tribunal fees, there is naturally some concern that these changes will reduce access to justice by making it more difficult for Claimants to bring a valid claim or deter them from doing so. The Government has stressed that the fee introduction is not intended to deter claims, however, it is likely that this will be an unavoidable knock on effect of the regime. Linked to cuts in Legal Aid plus changes in Employment law, such as the increase of the qualifying period for unfair dismissal, it may be that the fee structure will simply create another barrier to Claimants wishing to access the system. While the fee exemption procedure may go someway to protecting access to justice, those who do not qualify for fee remission but lack enough disposable income to make a claim may be excluded.

Should a Claimant be successful at the Tribunal, the Respondent will be ordered to reimburse the fees they have paid, however, this will not aid a Claimant should they have difficulty paying the fees in the first instance.

On the other hand, the move will clearly be welcomed by Employers who are often vulnerable to Tribunal claims and who may be required to expend large amounts of money defending sometimes vexatious and spurious claims. Further, the introduction of these fees may prevent serial litigants from pursuing numerous claims thus protecting Employers further.

As the Government has recognised, the introduction of a Hearing fee is likely to encourage early settlement of claims, reducing the costs for both parties and freeing up a significant amount of Tribunal time. At present, many claims settle days or even hours before the Hearing itself by which time the parties have incurred significant legal costs in preparation. However, a detrimental effect of this may be that some employers will simply “wait it out” in the knowledge that there may be some litigants who are unable to pay the Hearing fee and who will have little choice but to withdraw their claim. Alternatively, if a Claimant has paid the Hearing fee, it may deter them from any settlement negotiation and strengthen their resolve to see the matter through to the end.

All claims made on or after 29th July 2013 will be subject to the new fee regime. Those claims made before this date, will fall under the old regime and therefore will not be subject to any fees whatsoever, even if the Hearing is listed after 29th July 2013. Of course, this may see an influx of Tribunal claims in the period leading up to 29th July 2013 to avoid payment of any fees, though the amount of claims commenced after this date may be significantly reduced.

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