All change in the Employment Tribunal

Posted by Max Craft on
Monday 29 July saw one of the biggest changes to Employment law when the rules of the Employment Tribunal (ET) were substantially changed and fees were brought in for any application made to the ET.

The aim of the new rules is to simplify the system and give Employment Judges more discretion and flexibility in the decisions they make.

Employment Tribunal rules

Under the new rules employers may not even be aware that a claim has been submitted as Judges now have the flexibility to strike out a claim during an initial sift stage. If the Judge believes that the ET has no jurisdiction to consider the claim; it is in a form which cannot be sensibly responded to; or it is an abuse of process then the Judge can reject the claim immediately.

A further sift stage will give Judges discretion to strike out claims that have no reasonable prospect of success. The claimant will be able to make representations as to why the claim should not be dismissed and the Judge will then have the discretion to dismiss the claim either at a hearing or after carrying out a desktop review of the matter.

It remains to be seen whether Judges will be prepared to take such a robust approach but it is hoped that between them these two new sift stages will be able to reduce spurious claims.

Employment Tribunal fees

From now on claimants will have to pay a fee at the point of submitting a claim (either online, in person or by post) and then prior to the hearing. Failure to pay the fee means the claim will be rejected and could have gone past the (normally 3 month) time limit. The fees depend on the type of claim:

  • Type A (e.g. unlawful deduction from wages, holiday pay) – Issue fee £160, Hearing fee £230.
  • Type B (e.g. unfair dismissal, discrimination) – Issue fee £250, Hearing fee £950.
  • Multiple claims are either 2, 4 or 6 times the single fee depending on the number of claimants involved. In the Employment Appeal Tribunal (EAT) it will cost £400 to lodge an appeal and £1200 for a full hearing.

It is thought that this initial payment will put off a lot of claimants; however, they are able to apply for a full or partial remission of the fee in certain circumstances, e.g. low level of income or receipt of certain benefits. HM Courts and Tribunals Service has produced a general fact sheet for individuals as well as information and forms on fee remissions amongst other resources. The further fee payable by the Claimant before the hearing may encourage settlement or withdrawal – or it may have the opposite effect because the Claimant has already invested money.

Although at first glance fees appear to be a bigger issue for employees, employers could still end up paying fees. Firstly, the employer will have to pay for certain applications it makes in ET proceedings. Secondly, if a Claimant is successful, the ET can order an employer to pay for any fees which the Claimant has incurred (or vice versa if the employer's application is successful). This also means that if the claim is settled prior to the hearing it is likely that claimants will ask for any fees paid to be included in a settlement. At this stage the employer may not be aware of whether the claimant has paid the fees or qualified for a remission. The introduction of fees could therefore introduce a tactical minefield for employers.

A key concern for employers is that they can no longer assume, three months after termination, that a claim has not been submitted. The employer will not be notified that a claim has been made until a fee has been paid or remission granted and the claim has been through the sift stage. The process will naturally now be longer as the Central Office in Leicester, who will be dealing with these matters, will probably be overstretched and a backlog is inevitable. Combine this with the effect of the initial sift stage and it could be months before an employer is notified that a claim has been made.

It remains to be seen whether the new fees and rules will really drive down the amount of claims. In the mean time, the trade union Unison is being allowed to apply for judicial review of ET fees on the basis that they do not comply with EU law and are indirectly discriminatory. That hearing will be in October 2013.

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Max is a Consultant in our employment team.

Max Craft
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