Introduction of Fees in the Employment Tribunal

You may have noticed that there have been various articles in the media about changes to the way that the Employment Tribunal system works. This is because a recent government ordered review has taken place and has resulted in a number of proposed changes.

Whilst these changes are merely proposals and recommendations at this time it is important that as an employee you are aware of the possible changes and how they may affect your rights in the Tribunal in the future.

The first of the proposed changes that we are going to feature is the Introduction of Tribunal Fees.

Currently it is free to make a claim in the Employment Tribunal. This is one of the main differences between the Tribunals system and the Courts. Under the proposals there will be an introduction of fees for employees who wish to make a claim.

There are two fee scales:

Level 1 – for claims which are fairly straightforward and/or involve one issue.

Level 2 – for claims which are more complicated or involve multiple issues. A comprehensive list has not yet been produced but the Level 2 fee will certainly include claims for Unfair Dismissal and Discrimination.

Fees will be payable to start the claim and then for the Hearing.

The fees are likely to be:

                                                                 Level 1                                                  Level 2

To make a claim                                 £160                                                       £250

For the Hearing                                  £230                                                       £950

There will also be additional fees for any appeals – £400 to make an appeal and £1,200 for the Hearing.

Looking at these fees the first thing that struck us was how someone who has lost their job can afford to pay the fees. These are the very people who need to make a claim in the Tribunal and there is an automatic barrier to them doing so.

Fortunately, like in the Courts, those who are in receipt of benefits or have a low income will be able to complete a form that gives them a fee exemption, meaning that they will not have to pay the fees.

What has not been considered and we are unsure of at this time is what happens to those people who obtain a job between making the claim and the Hearing, and then cannot afford to pay the Hearing fee. Do they have to give up on the claim? Will they be refused if they want to continue?

Also there are going to be a large majority of people who do not qualify for a fee exemption but who cannot afford to risk having to pay up to £1200 just to get their case in front of the Employment Tribunal. What will happen to these people, and their employment rights?

The intention behind the introduction of fees has been stated as primarily three points:

1. To encourage the early resolution of the dispute by other methods than the Tribunal;
2. Encourage employees to consider the Tribunal as a last resort;
3. To reduce the burden of costs on the tax payer

Various governments have tried different methods to reach the first two objectives with Employment Tribunal claims all of which have had limited success.  The fundamental problem with these objectives and the reason why the intended effect will not be reached, in our opinion, is that there is such a short window of time (three months) in which an employee must make the decision whether to pursue a claim.

This is an extremely short time, particularly when you consider the time limits for pursuing other rights, including, for example Personal Injury claims.

Even if an employee seeks advice straightaway or contacts the Employer about alternatives to resolve the dispute it can often take a long time to get the negotiations going. Further to this many Employer’s will not negotiate or agree to alternative dispute resolution as they are aware of the limited timescales involved. They use it as a tactic to force the hand of the employee to see if they are really serious about pursuing a claim.

We can see no reason why this would change with the introduction of fees, and if anything there is more reason for an Employer to push it and wait to see if the employee is serious enough to pay £230 into the case just to preserve their rights within the time limit.

One positive point to note is that the Employment Tribunal will have the ability to order that the Employer pay back the employee for the costs of the Tribunal fees. The circumstances and frequency of these orders will of course depend on the guidance issued to the Tribunal, and will no doubt have to evolve throughout the cases that come before the different Tribunals, and inevitably end up at the Employment Appeal Tribunal.

We would love to hear what you think about the introduction of fees in the Employment Tribunal. Please leave your comments below or drop an email to contactus@realemploymentlawadvice.co.uk