The Ministry of Justice has confirmed that from July 2013 fees will be introduced in the formerly free Employment Tribunal.
The main purpose of the introduction of fees is to promote mediation and the settlement of employment disputes before proceedings are issued and from the Government’s perspective represent better value for the tax payer that funds the cost of the current system. This is tied in with greater powers for ACAS that are scheduled to come into effect next year, where any claims will have to be presented to ACAS in the first instance with the aim of attempting settlement before the involvement of the Employment Tribunal.
The Secretary of State for Justice stated that ‘We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives’.
The fee structure that is proposed will depend on the complexity of the claim that is presented. The fees will be payable online.
Firstly there will be Level 1 claims for straight-forward complaints. These would include unpaid wages, the right to payment in lieu of notice and the right to redundancy payments. These types of claims will attract an initial issue fee of £160. If the claim is not settled and proceeds to a hearing then there will be an additional fee that is payable of £230.
Secondly there will be Level 2 claims for more complex complaints, for example unfair dismissal, discrimination, equal pay and whistle-blowing. The issue fee for these types of claims will be £250 and the hearing fee will be £950.
In the event of multiple claims the issue fees and hearing fees will be higher and will depend on the number of claimants in such claims. As an example, the issue fee for a Level 1 claim for between 2 and 10 Claimants will be doubled to £230.
Fees are also being introduced for Preliminary hearings for example an additional £100 and in the Employment Appeal Tribunal the issue fee will be £400 and the fee for the full appeal hearing will be £1200.
The system will however be means-tested so that individuals on low incomes may not be required to pay the full fees with the implementation of some form of remissions system with reduced fees. The fee structure – once implemented – will be constantly reviewed by the Government to assess its impact on the number of claims entering the system and to determine whether any further changes are required.
These proposals bring the Employment Tribunal system more in line with the general Civil Court system where claimants are required to pay an issue fee. There is also concern that it may be cheaper and more efficient to bring certain types of claim, for example breach of contract, in the Civil Courts. Here the costs will be less plus there is the benefit of a longer limitation period. In addition, they will have no cap on the amount that can be claimed, which is currently limited to £25,000 in the Employment Tribunal.
The introduction of fees for claimants who wish to peruse employment rights therefore represents the biggest change to the Employment Tribunal system in a generation. It remains to be seen whether these changes will actually result in a noticeable reduction in the number of claims being issued. It will also be interesting to see whether the new system will be more of a detriment to the rights of individuals of moderate financial means, who may actually have genuine complaints, but who may be put off by the introduction of these fees.