Fees and penalties in the Employment Tribunal

16 May 2013

The Employment Tribunal Service has been free to users since it was created in 1964.  This is about to change.  The government says it is not fair for the tax payer to foot the bill for the service which it puts at £84 million per annum so fees are being introduced.

Fees will be charged according to the nature of the case.  In broad terms, Type A claims are technical cases such as unauthorised deductions from earnings, failure to pay guarantee payments, failure to allow time off work for trade union activities etc.  Everything else is a Type B claim and this includes unfair dismissal and discrimination.  Multiple claims involving both types will be charged at the higher rate for Type B claims. 

There will be two "fee charging occasions"; the issue of a claim and the listing of the claim for a final hearing.

The fee for issuing a Type B claim will be £250.  The hearing fee for a Type B case will be £950.  Group applications will attract a higher fee depending on the size of the group.  Fees are payable by the Claimant subject to remission depending on his or her financial circumstances.  The rules for remission are complex but, in essence, a Claimant in receipt of state benefits or on a low wage is likely to receive full remission. 

A reference to judicial mediation will attract a fee of £600 payable by the Respondent.

The fee payable by an Appellant lodging a notice of appeal with the Employment Appeal Tribunal will be £400 with a further fee of £1,200 on the listing of an appeal for an oral hearing. 

Along with these fees, the government will require all claims to be referred to ACAS for conciliation before the claim is issued by the Employment Tribunal.

The Employment Tribunal will be given new discretion to impose a penalty of up to £5,000 in cases where it considers there are aggravating features to the breach of a Claimant's employment rights (i.e. malice, recklessness or negligence).

The commencement date for the new regime has not yet been fixed but it seems likely to be in July or August.

Our view

This is good news for employers because it places a hurdle in the way of applicants.  On the other hand, we take the reason for the introduction of fees with a pinch of salt.  One of the constitutional functions of the state is to provide a system of justice accessible by all and after remission, the contribution which fees will make to the Employment Tribunal Service's budget is small.  The reality is that fees and pre-issue conciliation are an attempt to deter worthless claims but nuisance Claimants will always find a way through the system.  Fees are more likely to deter sound lower value claims and may therefore deny justice to more vulnerable Claimants; we shall see.