On 13 July 2012, the Ministry of Justice published its response to the consultation on Charging Fees in Employment Tribunals and the Employment Appeal Tribunal. From next summer, a two-stage fee charging structure will be implemented in the Employment Tribunal and Employment Appeal Tribunal (EAT), requiring claimants to present an "issue fee" when they submit their claim or appeal, followed by a "hearing fee" prior to a hearing. While many employers have welcomed the proposals to charge fees, Unions have branded the decision a disgrace and warned that workers will be denied their right to justice.

Background

Last year, as part of its continuing drive to reform employment law, the Government announced that it would introduce fees in the employment tribunals and the EAT in order to encourage businesses and workers to mediate or settle a dispute rather than go to a full hearing.

On 14 December 2011, the Ministry of Justice launched the consultation seeking views on two significantly different fee charging structures:

  • Option 1 proposed an issue fee and a hearing fee, the amount of which would depend on the nature of the claim and whether it was an individual claim or a multiple claim; and
  • Option 2 proposed only an issue fee, the amount of which would depend on what the claimant states his/her claim to be worth.

Both options proposed a range of application-specific fees and it was agreed that the HM Courts and Tribunals fee remission scheme would be adopted for those who could not afford the fees. The consultation also proposed that a two-stage charging system, similar to Option 1 in the tribunals, should also apply in the EAT. The consultation closed on 3 March 2012.

Consultation Response

On 13 July 2012, the Government confirmed that it will proceed with Option 1. A claimant will now be required to pay an issue fee when he/she lodges a claim and if the claim proceeds to a full tribunal hearing, he/she will be required to pay a subsequent fee, provisionally around four to six weeks before the hearing date.

The level of the fee will depend on the type of claim. Level 1 claims comprise more straightforward and lower value claims, generally for sums due on termination of employment, for example claims for unpaid wages, payments in lieu of notice and redundancy payments, which are less costly to administer and deliver judgment on. Level 2 claims comprise all other claims, including unfair dismissal, discrimination, whistleblowing and equal pay claims. Where more than one claimant is bringing the same claim, the fee structure takes into account the number of claimants who are bringing the claim. The Government is also intending to implement fees for specific separate applications to the tribunal (for example, applications to set aside a default judgment and applications for judicial mediation will have fees attached to them).

As proposed in the consultation, fees in the EAT will mirror the twostage structure to be implemented in the employment tribunals. There will be a fee to issue an appeal and a fee to proceed to a full hearing.  

The basic fee structure is set out below:

Click here to view the table.

Impact

Although the Government had stated in September 2011 that tackling weak and vexatious claims was the reason it was introducing fees, in the consultation response, it clarified that deterring claims is not the purpose behind introducing fees and that the regime is instead founded on the principle that users of the tribunal system should bear some of its cost (as well as encouraging the settlement of disputes at an early opportunity).

Employee groups have unsurprisingly been opposed to the principle of paying any fees at all, arguing that fees would prevent access to justice and deter workers from making valid claims. However, since most claimants will be out of work at the point of lodging proceedings, and therefore will most likely benefit from the HM Courts and Tribunals fee remission system, the introduction of fees may well only have a limited impact in reality. In addition, tribunals will be given a discretionary power to make an order that fees paid by the successful party will be reimbursed by the unsuccessful party. The true impact of the proposals remains to be seen.