Will the new Employment Tribunal Fees cause problems for Respondents?

From 29 July 2013, any claim brought in the Employment Tribunal will be subject to an issue fee and a hearing fee.  The level of fees will depend upon whether the ground on which the claim is brought is categorised as a Type A claim (most wage claims) or a Type B claim (more complex claims for unfair dismissal, discrimination and whistleblowing.)  A number of applications such as applications for reconsideration of a judgement and dismissal of a claim following withdrawal will now also carry a fee.  A copy of the Fees Order which includes details of all fees can be found here.

Individuals are entitled to apply for remission from paying these fees where they can show that either their gross income or monthly disposable income is below the threshold for payment or where they are receiving qualifying benefits.

Issue Fee – Procedure

If a claim is not accompanied by an issue fee or a remission application then the tribunal will reject the claim. If the claim is rejected and is still within the limitation period (usually 3 months), the Claimant may resubmit the claim form and pay the correct issue fee or make an application for remission.  If not, the claim will be out of time and there is no scope within the new rules for reconsideration of the claim.

If a Claimant intends to rely on a fee remission when issuing a claim, they must send the remission application to the tribunal with their claim form. The tribunal will need to consider this application and the supporting evidence before deciding whether to accept the application and issue the claim or reject it and request payment of the issue fee from the Claimant.  If the remission application is incomplete, the tribunal will need to request further information from the Claimant before considering the application.  If the remission application is accepted, the Respondent will be notified of the claim and asked to provide a response within 28 days.  Depending on how long the tribunal takes to consider a remission application, this notification may not be provided until long after the three month limitation period (for the majority of claims) has passed.  Similarly, if the remission application is rejected, the Claimant will be given further time in which to pay the fee and if the fee is not paid, the claim will finally be rejected for non-payment.

If the incorrect fee is submitted the tribunal will issue a notice giving the Claimant a date by which the payment must be made, failing which the claim will be rejected.

Respondents will only be notified of a claim once the issue fee has been paid or the remission application has been accepted.

Issue Fee – Considerations for Employers

Due to the time it will presumably take to deal with remission applications and part payments, it is easy to see how the process of issuing claims will take much longer than it previously has done.

The additional procedures mean that it could take 2 months from a Claimant submitting a claim before an employer is even aware that a claim has been issued. For example, an employee issues a claim of unfair dismissal on the last day of the limitation period (3 months less one day after the termination date). The Claimant applies for remission when issuing his claim. The tribunal reviews the application and requests further information from the Claimant (this could take another 2 weeks) giving the Claimant say, one week to respond.  The Claimant provides the information to the tribunal on the last day of the deadline.  The tribunal takes, subject to workload, another 2 weeks to consider the additional documents, and then decides that the Claimant is not entitled to remission. The tribunal writes to the Claimant notifying him that he is not entitled to remission and sets a date for the issue fee to be paid which could be another 1 or 2 weeks.

Accordingly, it is possible that the Respondent would only become aware of the claim after 5 months from the termination date of the Claimant. Employers should therefore ensure that they keep adequate employee records for an extended period of time after a dismissal or incident has occurred and that they remain mindful that they can no longer discount the possibility of being notified of a claim after the three month limitation period has ended.

However, the hope is that the introduction of fees will deter employees from bringing unmeritorious claims and that this will result in a reduction of the total number of claims.  It remains to be seen whether this will in fact be the outcome or whether the new fees will simply cause uncertainty for employers and make it harder for those with valid claims to issue proceedings.

Hearing Fee – Procedure

Once the date for a hearing has been set, the tribunal will send a notice to the Claimant giving a date by which the hearing fee must be paid.  For Type A claims, the hearing fee is £250 and for Type B claims it is £950.  It is not yet clear whether the Notice of Payment will be included within the hearing notice sent to both parties or whether the tribunal intends to write to Claimants separately to request payment of the hearing fee.

If the Claimant fails to pay the fee by the specified date and a remission application has not been submitted (in respect of the hearing fee), the claim will be dismissed without further order.  However, the Claimant will have the opportunity to apply for reinstatement of the claim.  This will only be granted if the correct fee is paid or a remission application is submitted and accepted by the date specified in the order.  Again, in respect of remission applications, the tribunal may need to request further evidence from the Claimant in order to consider the application. This may lead to further delays to proceedings.

It is likely that many Type A claims will be dealt with on the fast track meaning that a hearing date may be set for as little as 28 days after a claim is issued.  In these circumstances, it is easy to foresee situations in which issues around payment of the hearing fee or acceptance of the remission application have not been resolved in time for the proposed hearing date.  It is unclear at this stage how the tribunal is going to deal with these circumstances but it seems likely that there will be backlogs and delays to proceedings as a result of the new regime.

Hearing Fee – Considerations for Employers

These possible delays give rise to an unclear situation for Respondents in which they will have no assurance as to whether a claim will go ahead until possibly a few days before the hearing is due to take place.  In turn, this is likely to give rise to problems for Respondents in relation to costs. As the Respondent will not be aware whether or not the Claimant has paid the hearing fee until potentially a week before the hearing date, a Respondent could be in a situation where it has prepared fully for the hearing and booked Counsel only to find out a few days before the hearing that the claim has been dismissed due to the failure of the Claimant to pay the hearing fee.  It remains to be seen whether the tribunals will take a sympathetic approach with Orders of costs in these circumstances.

Judicial Review of the new regime

Unison have made an application for judicial review against the introduction of fees into the ET and EAT.  A similar application has been made by the law firm Fox and Partners in Scotland.  If either of these applications is successful, the fee regime could be reversed in both jurisdictions.  As such, the future of ET and EAT fees remains uncertain.  However, for the moment, the fees and processes discussed above and detailed in the Fees Order remain in force.

If you would like further information about the new fee regime or about the new employment tribunal rules in general, please contact a member of the Devonshires Employment team.

This entry was posted in Devonshires, employment, employment law. Bookmark the permalink.

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