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Fees to be introduced in the Employment Tribunals

31st July 2012

The Ministry of Justice has published its response to the consultation over the introduction of fees in the Employment Tribunals.The intention appears to be that fees will be introduced in the latter half of 2013.

Currently claimants are not required to pay fees on commencing claims in the Employment Tribunal, nor at any stage of the Tribunal process. The rationale that the Government has relied upon in the response to the consultation process is that claimants should be expected to make a contribution towards the costs of the Tribunal system, hence reducing that cost to the tax payer. The latest estimate is that the Employment Tribunal system costs roughly £84 Million each year.

The proposals are that there should be fees paid at two distinct steps in the litigation process; firstly at the instigation of the claim in the Tribunal, and secondly on requesting a hearing date (if the case remains contested).

The fee structure proposed sets out two levels of fees. The first level is for the more straightforward cases, such as those dealing with claims over unauthorised deductions from wages. and statutory redundancy payments (there is a detailed list provided in the response to the consultation document). These cases will attract an issuing fee of £160, and then an additional fee for requesting a hearing of £230.

The second level of claims, which will include unfair dismissal claims, and discrimination claims, will attract an issuing fee of £250, and a hearing fee of £950.

There is also a fee structire for mulitple claims (ie those cases where two or more claims from different claimants are linked).

It is also proposed that there should be a fee of £400 on commencing an appeal in the Employment Appeals Tribunal, plus a hearing fee there of £1,200.

One aspect of the proposals that may come as a surprise to many (including a lot of businesses) is the fee for an application to dismiss a claim after it has been settled. Furthermore there is to be a fee of £600 for use of the judicial mediation available at the Tribunal if the parties wish to use that service rather than proceed to a contested hearing.

There will be exemptions to the payment of fees for some claimants, using the system that applies in the County Court over fee exemptions.

The Tribunal will have the discretion to order a losing respondent (ie the employer or former employer) to pay the issusing and hearing fees to the successful party.

The aim of the Government seems to be to make the Employment Tribunal the "option of last resort to resolve employment disputes." It is also clear that they are hoping it will force people to think twice before issuing any claim in the Tribunal. However, our concern is that the system will probably make it harder to reach settlement once a claim has been lodged, as the claimant will always want to recover their fee in addition to some compensation for the main claim itself, hence the cost of settlement will rise. Furthermore the introduction of fees is likely to cause the development of further "satellite litigation" over the subject of fees. It also seems odd, and perverse, to have a system that will require an issuing fee of £160 in a case where the claimant is seeking recovery of wages that could be lower than that amount. Much has been said about the fact that there will be exemptions for some. However, the number of those entitled to exemptions will be small, and it will be those people that have modest incomes (but just above the exemption level) that will be most deterred by the introduction of fees in the Employment Tribunal, not the very poor. It is also odd that the proposal of a fee of £600 to use the judicial mediation service has been proposed. Surely if the real aim of the proposal was to encourage alternative means of resolving employment disputes this fee would be fixed at a lower figure, in order to make this option clearly more attractive than a contested hearing!

If you require any advice on the matters raised in this article, please do not hesitate to contact us at Hallett Employment Law Services Ltd.    



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