From the summer, fees will be introduced into the employment tribunal system. Fees will be charged at two stages: the first upon issue of the claim; and the second prior to the hearing.
The changes to the employment tribunal system are being driven by a requirement for efficiency and a change in the funding of the tribunal service, away from the taxpayer and onto the system users.
The level of the fee will depend on the nature of the claim:
- Level 1 claims, covering disputes over matters such as unauthorised deductions from wages and unpaid redundancy payments, will be subject to a £160 issue fee and £230 hearing fee.
- Level 2 claims, which include claims for unfair dismissal, discrimination, equal pay claims and whistle-blowing, will be subject to a £250 issue fee and £950 hearing fee.
Payment of fees will no doubt affect the mindset of many tribunal users. Reimbursement of fees will inevitably be a feature of any settlement negotiations and we expect to see more claims settling before the hearing fee is due.
It is anticipated that the changes will be in force by July 2013.
Reform of Tribunal rules
The Underhill Review has given rise to new Tribunal Rules which will be introduced from April 2013. The new rules use simpler language and are much shorter than the old rules in an effort to make them more understandable for unrepresented parties.
The changes to the Tribunal Rules include:
- the introduction of a "sift" stage. A judge will review the case on the papers once the claim and response have been received to make directions or, if appropriate, consider whether to strike out a party's case.
- tackling non-payment of tribunal awards, specifically a proposed 14-day deadline for payment after which interest would accrue;
- introduction of Presidential Guidance to manage expectations and ensure consistency in case management;
- removal of the £20,000 cap on costs awards; and
- the introduction of financial penalties for employers which lose a claim. The penalty will be payable to the Exchequer not the claimant. The penalty will be half of the total award made by the tribunal, with a minimum threshold of £100 and a maximum ceiling of £5,000. A 50% reduction will be applied if paid within 21 days.