Re-Introduction Of Employment Tribunal Fees

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Re-Introduction Of Employment Tribunal Fees

Author: Beth Gilbert

Key Contact: Claire Knowles

The government has issued a consultation paper on re-introducing fees in Employment Tribunals (ET) and the Employment Appeal Tribunal (EAT), nearly seven years after the Supreme Court quashed the previous charging regime as unlawful.

Background

Whilst there are currently no tribunal fees in the ET and EAT, fees were previously in place from July 2013 to July 2017. The fee regime categorised ET claims into ‘Type A’ or ‘Type B’ claims with different fees payable dependent on the type of claim, as follows:

  • Type A claims (which covered simple disputes such as unpaid holiday pay) attracted an issue fee of £160 and a hearing fee of £230, totalling £390 in fees.
  • Type B claims (which covered more complex disputes such as discrimination) attracted an issue fee of £250 and a hearing fee of £950, totalling £1200 in fees.
  • The EAT attracted a £400 issue fee and a £1,200 hearing fee, totalling £1,600 in fees.

The introduction of fees in 2013 led to a substantial fall in the number of claims brought to the ET. However, the fees were withdrawn in July 2017, after trade union, Unison, successfully argued before the Supreme Court that they prevented thousands of employees, particularly people on low incomes, from securing justice. The fee structure was also found to be indirectly discriminatory against individuals who were more likely to bring Type B claims, compounding any discrimination they had already been subjected to with higher court fees.

Why is the government proposing a re-introduction of fees?

The proposal to introduce fees in the ET and EAT is intended to relieve some of the cost to the general taxpayer by requiring tribunal users to contribute towards the tribunal system, where they can afford to do so.

The government admits that the fee structure introduced in 2013 did not strike the right balance between fairly apportioning court costs and protecting access to justice. Having considered the lessons learned following the Supreme Court judgment, the government is seeking to develop its fee proposal subject to public consultation.

What fees are being proposed?

  1. Claim issue fee for the Employment Tribunal
  2. £55 issue fee that is payable by the claimant on bringing a claim to the ET.
  3. Where a claim is brought by multiple claimants, the fee remains at £55. This can therefore be divided among all the claimants involved, as agreed between them.
  4. The fee will cover the entire journey of a claim in an ET.
  5. Appeal fee for the Employment Appeal Tribunal
  6. £55 fee is payable by the appellant upon lodging an appeal in the EAT.
  7. A fee of £55 is payable per judgment, decision, direction, or order of an ET being appealed. For instance, if a notice of appeal includes appeals against two ET decisions, the total fee payable would be £110.

Are there any exemptions?

An exemption would apply in the case of claims in which individuals are seeking a right to payment from the national insurance fund (NIF), generally applicable only on the insolvency of an employer. Where individuals need to bring proceedings before an ET to establish their right to a NIF payment, no fee would apply. A system for remission from fees will also exist for those who genuinely cannot afford the fees.

What does this mean for employers?

The consultation on this matter is currently running for a period of 8 weeks from 29 January 2024 to 25 March 2024. It is proposed that, if implemented following the consultation, fees will become payable from November 2024, so there is no immediate impact.

In comparison to the level of fees introduced in 2013, there is less likely to be a legal challenge to the proposals on the basis of affordability and equal access to justice. However, criticism is still rife from Trade Unions so only time will tell if the fees are implemented. If fees are implemented, fees may incentivise parties to settle their disputes early through ACAS without the need for claims to be brought to an ET. Generally, the number of claims being brought against employers is likely to be reduced, especially for lower-value claims such as small unfair deduction of wages claims.

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