Government review of Tribunal fees published

In July 2013 fees were introduced in the Employment Tribunals. The level of fees were fixed according to the nature of the claim being brought (not the actual value of the claim). Fees became payable on the commencement of the claim (known as the "issuing Fee"), and a further fee on the case being listed for a hearing. For the most common type of claim, ie of unfair dismissal, the two fees came to a total of £1,200. Limited scope for fee remissions were allowed. Since the introduction of the fees there has been a stark drop in the number of claims being submitted to the Employment Tribunals.

The significant drop in the number of claims reaching the Employment Tribunals since the introduction of the fees has resulted in legal challenges to the fees themselves, notably brought by UNISON, the union. The pressure on this subject has resulted in the Government carrying out a review of the Tribunal Fees scheme.

Following many delays, the Government has published its review.

In conclusion the Government review accepts that the drop in claims to the Tribunals was much greater than was expected. It also accepts that some people have been discouraged from bringing a claim due to the fees. However, it concludes that "there is no conclusive evidence that they have been prevented from doing so."

In noting the large drop in claims the report refers to the ACAS Early Conciliation Scheme as being largely responsible for the drop in claims going onwards to the Tribunals. Nevertheless, the Government did note that between 3,000 and 8,000 people mot resolve their dispute through ACAS but did not then bring a claim in the Tribunal because they stated that they could not afford to pay the Tribunal fees. The Government disputes whether this necessarily means that the individuals concerned could not in fact afford to pay the fees.

The Government does accept that "the review highlights some matters of concern cannot be ignored" and that "the Government has decided to take action to address these concerns."

The measures to address the concerns that have been identified are proposals to alter the fee remission scheme. The review sets out the details of those proposed changes. Basically the proposals are to increase the income threshold to allow a full remission at a level of income broadly equal to the National Living Wage (which is currently set at £7.20 per hour). The new gross monthly income threshold is set to be at £1,250 for a single person without children, with increases in the income level for those with children, and couples. However, there is no clear indication that this level will increase with any future change in the rate of the National Living Wage. A number of distinct claims will be exempted from fees altogether, including those brought against the National Insurance Fund for redundancy payment- which typically arises where the individual's employer has become insolvent.

The UNISON challenge to the Tribunal fees is due to be heard in the Supreme Court at the end of March 2017, so the review may not be the final word on the subject, and in any event consultation on the review will not close until the 14th March 2017.

In the meantime, in answer to a Parliamentary question, the Government has conceded that it has only recovered £17,704 in fines against employers levied at the Employment Tribunal. The powers to make such penalty fines arose in April 2014.The power enables the Tribunals to make orders against employers for an aggravated breach of employment law. Prior to the introduction of the fines the Government estimated that Employment Judges would impose such fines in some 25% of cases- which they estimated would result in raising £2.8 Million. That would go to the Treasury, not to the successful claimant. The fees that can be levied range between £100 and £5,000. The answer to the parliamentary question revealed that only 18 such penalties had been issued, and only 12 of those had been paid. It can really be no surprise that with the substantial fall in the number of claims taken to the Employment Tribunal, that the number of such fines against employers has been much smaller than was estimated by the Government.Both the figures showing the substantial drop in Tribunal claims, and the very low figures of fines against employers suggest that the Government's predictions on the level of use of the Employment Tribunals and the operation of the Tribunals are somewhat unreliable!

If you need advice on any of the issues raised in this article please do not hesitate to contact Hallett Employment Law Services Ltd.