Introduction of new fees based system in employment tribunal claims

As part of the Government’s ‘red tape challenge’ which has seen a comprehensive review of existing employment law, the Ministry of Justice has released their response to the consultation on the introduction of employment tribunal fees.

Employment tribunal fees will now be introduced from summer 2013.  The stated aim is to reduce the £84m running costs of the employment tribunal system, cut down the amount of weak claims and to ensure that the employment tribunal is a last resort complex cases. Currently the entire cost of an individual to bring a claim or appeal to the employment tribunal is met by the taxpayer.

The fees will be payable in advance, in two stages. The first instalment will be payable upon issue of the claim, and the second instalment before the full merits hearing. The level of the fees will depend on the nature of the claim:

  • Level 1 Claims comprise straightforward claims such as claims for defined sums, unauthorised deductions from wages and redundancy payments and will incur a £160 issue fee and a £230 hearing fee
  • Level 2 Claims comprise more complex claims such as claims for unfair dismissal discrimination and equal pay and will incur a £250 issue fee and a £950 hearing fee
  • Appeals will incur an initial £400 appeal fee and a £1,200 hearing fee

There will also be a £60 fee for applications to dismiss following settlement and a £600 fee for judicial mediation. Tribunals will also have a discretionary power to order that the unsuccessful party reimburse the successful party.

Comment

Justice Minister Jonathon Djanogly justifies the measures by saying they encourage “quicker simpler and cheaper alternatives like mediation”  and ensure individuals pay “a fair contribution for the system they are using”.

However, the fees have been heavily criticised for a number of reasons, particularly by the trade unions. Brendan Barber, TUC general secretary, last week expressed his concern that the measures will deny low paid individuals, with good claims, access to justice.  However, the fees will be means tested. Individuals on low incomes will be excused from paying the full fees. The finer details of the extension of exemptions to cover this point will be the subject of a further consultation later this year.

Critics also believe the measures will reduce the overall total number of claims genuine claims, not just weak claims. For example, the Trade Unions are concerned the fees have the potential to undermine justice by deterring individuals who could afford the fees and who have a genuine claim from bringing a claim in the first place. Thus, allowing employers to get away with instances of discrimination and other offences.

Employers are supportive of the measures. Alexander Ehmann of the Institute of Directors stated he hoped the measure would make individuals “think twice before submitting vexatious or weak claims”.

The primary reason for the fees is an extension of the austerity measures to reduce the running costs of the tribunal but the desired ancillary effect of this is that the new fee structure will reform the tribunal into a streamlined system for the only most merit worthy claims.

The success of the reforms will no doubt be down to the outcome of the further consultation due to take place on the exemptions for individual’s from payment of fees later this year.

 

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