The Government has this month revealed their proposals for a fee structure for use of the Employment Tribunal system, following the consultation which ran from December 2011 to March 2012. The consultation sought views on two different structures: a one-off fee to lodge a claim depending on the value of the claim, or a two-tier system with fees for lodging a claim and for taking it to hearing.

The Government has now confirmed that it has opted for a two-tier fee. The alternative - a one-off fee to lodge a claim depending on the value of the claim - has been rejected. Fees will therefore be levied at two points in the Employment Tribunal process with claims split into two "levels" depending on their perceived complexity:-

  • Level 1 - straightforward claims (e.g. unlawful deductions, notice pay and redundancy pay): £160 to lodge the claim, £230 hearing fee
  • Level 2 - most other claims (e.g. unfair dismissal, discrimination and equal pay): £250 to lodge the claim, £950 hearing fee  

There will also be fees for the following:-

  • Judicial mediation - up to £600
  • Application to dismiss a claim - £60
  • Employment Appeal Tribunal - £400 to lodge the appeal, £1,200 hearing fee  

It has also been confirmed that the existing fee remission scheme for civil court users will apply in the Employment Tribunal (subject to further review). This means that many people on low incomes will be exempt from paying all or any fees – further details of this are to be announced in due course.

Whilst it was initially suggested that the introduction of fees would help to reduce the number of weak claims submitted to the Tribunal, the consultation now admits that, in addition to promoting early settlement of disputes, the main reason for the introduction of fees in the Employment Tribunal is to reduce the cost of the Employment Tribunal to the taxpayer. The Employment Tribunal system currently costs the taxpayer around £84m per year to run (although it has been made clear that these fees will not fund the full costs). The introduction of fees is likely to be good news for employers and it is likely to deter at least some employees or ex-employees from proceeding with claims that they might otherwise have raised, particularly more spurious claims. Innes Clark, Lindsay Anderson and Jillian Paton of our Employment Team discuss the introduction of fees and various other proposed changes to employment law in our latest podcast which you can access here.

The Government is currently aiming to implement the changes in summer 2013.