Introduction of Employment Tribunal Fees

The new regime of charging fees in the Employment Tribunals is now in force. An employee wishing to bring a claim againsthis/her employer inan Employment Tribunal will now have to pay a fee unless he or she qualifies for the fee to be waived.

How much will an employee have to pay?

The amount of the fee depends on the type of claim(s) being brought. For simple claims such as unlawful deductions from wages, breach of contract and statutory redundancy pay, the issue fee will be £160 and the hearing fee £230. For more complex claims such as discrimination, unfair dismissal and whistleblowing, the issue fee will be £250and the hearing fee £950. If there is amix of claims attracting different fees individually(for example, a claim forunlawful deductions from wages plus unfair dismissal), the higherfees are payable. Employers may regard this as a welcome development given that such fees may dissuade employees from bringing claims. However, there is a remission scheme, which may result in the whole ora partof the feesbeing waived. It is designed to ensure those employees who cannot afford the fees are not prevented from having access to justice. There are three routes to qualifying for the remission scheme: 1. Qualifying benefits. If the employee is receiving one of five qualifying benefits at the time when the fee is payable, he or shewill not be required to pay the fee. 2. Gross annual income. If the employee’s gross annual income (together with that of their partner if they are a couple) is lowerthan an applicable threshold at the time when the fee is payable, he or she will not be required to pay the fee. 3. Disposable monthly income. An employee, who has not qualified for a full remission through either of the first two routes, mayqualify for a full or part remission of fees by reference to their disposable net monthly income. The individual will need to provide evidence to prove eligibility and if the application for remission is unsuccessful, the Employment Tribunal will provide a deadline by which the fee must be payable. The remission scheme is under consultation and may change over time.

Will an employer have to pay any fees?

Yes, in certain situations. For example, if an employer wants to bring a counterclaim in response to an employee’s contract claim, the fee is £160. If an employer makes certain applications during the proceedings, it will be responsible for paying any application-specific fees, such as £100 for a reconsideration of a default judgment. If the case is listed for judicial mediation the employer will have to pay £600.

Subject to a legal battle

The union, Unison, and Scottish law firm, Fox and Partners have both applied for judicial review of the fees. Unison’s main arguments are that fees would make it difficult for claimants to exercise individual rights conferred by EU law and that it is discriminatory against women, who on average earn less then men. It also argues that no other First-Tier Tribunals charge fees and that no assessment has been done on the adverse effect of fees on discrimination claims. The application is due to be heard in October 2013. Fox and Partners applied to prevent the introduction of fees in Scotland but was unsuccessful. However, a full hearing will take place later this year when Fox and Partners will argue that the fees place an unfair and disproportionate burden on employees who wish to bring claims. The government has promised that if the fees regime is judged to be unlawful all fees will be repaid with interest. Ultimately, the new regime of fees may result in higher costs to employers in the long run as employees are likely to demand reimbursement of their fees in any settlement and with an unruly claimant in person, each application to the Tribunal will result in payment of £100. Further, if employees are successful with their claims, the Employment Tribunal may order employers to refund their fees. When combined with the other forthcoming employment law changes such as financial penalties for losing employers and the ACAS mandatory early conciliation regime, employers may need to think even more carefully about whether to engage in settlement discussions before claims are received to avoid increased settlement costs. On the other hand, an employee may be more wiling to settle before taking their claim to an Employment Tribunal to avoid the fees.