Employment Tribunal Fees: A Barrier To Justice
Employment Tribunal fees were introduced on 29 July 2013 and, although two Judicial Review challenges to the fees will be heard later this year, they look to be here to stay as it appears to be unlikely that fees will be overturned.
My colleague Stuart Markless has already set out information about the fee scales in his blog post “Act Now to Avoid Employment Tribunal Fees”.
We, along with many other UK employment lawyers, consider the introduction of these fees to be a significant obstacle to obtaining justice. These fees are a large amount of money for someone who may have been dismissed and is no longer working and earning a wage.
Although the Government has introduced a remission scheme, this is extremely complicated and the likelihood is that these fees are not going to bring anything like the Tribunal’s £84 million annual bill, which was the Government’s aim in introducing these fees.
Also, if a claim is lodged without payment or an application for remission of the fees, this will be returned and could result in cases being out of time. Unlike other types of claims, such as breach of contract in the county courts, where the applicant has six years to bring a claim, employment claims have a limitation period of a mere three months.
Fees also have to be made by the party making necessary applications to move the case on, so this also affects employers. It was particularly disappointing to hear that, despite widespread opposition, there would also be a flat fee payable by an employer where the parties agreed to Judicial Mediation. This is a shame, as mediation has proven to be a comparatively swift and more economical way of resolving claims. The fear is that employers will be reluctant to pay the mediation fee of £600 despite a success rate of over 65% where cases have been resolved.
Another change on 29 July 2013, which has attracted a lot less publicity, was the reduction of the statutory cap to be applied to compensation awards for unfair dismissal. There is now a complex formula for calculating this cap. In broad terms the maximum compensatory award is now the lowest of either £74,200 or 52 weeks pay. This is 52 x 1 weeks actual gross pay for the employee at the time of dismissal.
The change will apply if the dismissal fell after 29 July 2013. The only exception to this is dismissal for whistleblowing or for carrying out health and safety activities or if selected for redundancy for one of these reasons.
This is likely to have a huge effect on employees who still have valuable benefits such as a final salary pension. The loss of their pension would have previously been claimed in addition to any loss of earnings. In many cases their pension would have been the most valuable part of their claim.
This statutory cap will mean that these employees will not be able to get fair and adequate compensation to cover their losses, even if they win their case.
The Coalition Government are keen to come across as the “employer’s friend”. However, the overriding principles of the Employment Tribunal, such as fairness and placing the parties on an equal footing, seem to have been completely eroded. These concepts assist in promoting harmonious employment relations, which at a time of economic hardship are more important than ever.