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Introduction Of Fees In Employment Tribunals

Stuart Markless

Stuart Markless

On 13 July the Government announced its response to the consultation on introducing fees in Employment Tribunals. The consultation did not cover the desirability of such a move, merely what system should be adopted. This was despite opposition from lawyers and organisations representing employees who argued that this step would hinder an individuals access to justice.

The Government have opted for a two stage scheme whereby employee Claimants pay an initial issue fee and then a hearing fee before the case can be heard. There are two levels of fees. “Simpler” Level 1 claims such as unpaid wages, notice pay or Redundancy Payments will cost £160 to issue and £250 for a hearing. More complex claims including unfair dismissal, discrimination and whistle-blowing will cost £230 to issue and £950 for a hearing. There will be other fees for other applications within proceedings, the most significant of which is a charge of £600 for judicial mediation. However, this fee will be payable by the employer.

The remission system that currently operates in the civil courts will apply, meaning that those who qualify – for example those on low incomes or in receipt of certain benefits – may not be required to pay all or some of the fees. Although Tribunals will be given a discretionary power to order that fees paid by the successful party will be reimbursed by the unsuccessful party, reimbursement is not automatic.

Although the stated aim is for users of the Tribunal system to pay for it rather than the taxpayer, the main charges only fall on Claimants. There is no fee payable in order for the employer Respondent to lodge their defence. Most importantly, the cost of the hearing is not being borne by both parties, which means there is no incentive for a Respondent to settle.

This will undoubtedly introduce a significant deterrent for Claimants that will inhibit access to justice. Low paid workers seeking to recover relatively small sums of money may find that the fees represent a high proportion of, or may even exceed, the amount they are claiming.

In addition, unscrupulous employers may be encouraged to engage in “sharp practice” believing that their staff are unlikely to take legal action. Similarly, workers experiencing discrimination will have the additional disincentive of a significant financial outlay to add to the trauma involved in pursuing a claim.

The fee system will also bring new tactical nuances to Tribunal negotiations. With hefty hearing fees Respondents may delay making offers until Claimants have made that payment. From that point Claimants will probably be factoring in the fees in deciding what they will accept. These considerations may lead to fewer settlements.

Some of the reasoning behind the introduction of fees has been confused with arguments about deterring vexatious and unreasonable claims, when in fact the Tribunal already has powers to order the payment of deposits and strikeout orders for unmeritorious claims.

The fact that all of these fees have to be paid by the employee, except the judicial mediation fee, appears to be a calculated move by the Coalition government to be seen as the friend of the employer. In addition, the majority of lawyers acting for both Claimants and Respondents were opposed to any fee being charged for mediation as this could discourage employers from using Judicial Mediation. This is a shame because Judicial Mediation has proven to be an effective and efficient way of resolving lengthy cases of more than three days, thus saving the taxpayer money by reducing the amount of hearing days.

The Government says it will review the fee system to see how it is working and if it is achieving its stated aims. Whilst the full effects remain to be seen, I have no doubt that this move to introduce fees in the Employment Tribunals is not in the interests of justice.

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