Countdown to fee day
For those of you keeping up to date with employment law developments the date 29 July 2013 should already be in your diaries.
This is the day that fees are introduced for commencing Employment Tribunal claims. In a recent development however, Unison, Britain’s biggest trade union, has applied to the High Court for a judicial review of the government’s decision to bring in Employment Tribunal fees in an attempt to prevent the "brutal" charges being introduced.
Background to the changes
Readers will be aware from our Summer 2012 Newsletter of the proposals to change the Employment Tribunals Procedural Rules. The most visible change, certainly from the perspective of potential claimants is the introduction of a new fee structure for the making of all claims in the Employment Tribunal presented on or after 29 July 2013.
It is anticipated that the introduction of fees will reduce the number of vexatious and speculative claims in the long term. Recent statistics from Her Majesty’s Courts & Tribunals Service (published last month) showed that the number of Employment Tribunal claims accepted in the quarter January to March 2013 had risen by 3% compared to the previous 12 month period. With the introduction of fees, claimants may take a more considered approach in deciding whether to make a claim. Further, it is hoped that over time, the expensive process of administering justice in the Employment Tribunals will be funded entirely by such fees, bringing the funding system of the Employment Tribunals in line with the funding system of the Civil Courts.
All about the fees…
The new fee system provides that less complex claims, Type A claims, will incur a fee of £160 at the point of issue (that is when presenting the claim to the Employment Tribunal) and a further fee of £230 before the hearing takes place. Such claims include claims for unpaid wages, redundancy payments and claims for pay in lieu of notice. The total cost of making the claim will be £390 and it is generally acknowledged that these claims are more straightforward and cheaper to run. The more complex Type B category of claims include claims such as unfair dismissal, discrimination and equal pay, and are more costly to deal with. The issue fee is £250 and the hearing fee is £950, meaning that the cost to the claimant will be £1,200 if the matter proceeds to a hearing.
Under the new Rules, if a claim form is not accompanied by the requisite fee or a remission application, the claim form will be rejected by the Employment Tribunal. Similarly, at the hearing stage, if the fee or remission application is not provided by the due date, the Employment Tribunal will advise the party in writing of a deadline by which time the fee or application must be made, failing which the claim will be dismissed. Although the Employment Tribunals have a discretion to reinstate the claim if the payment or application is made after the deadline, it is difficult to judge how lenient Employment Tribunals will be, and whether this will be a frequently exercised power, or one which is only used in exceptional circumstances. Furthermore, the time for presenting a claim will continue to run until the Employment Tribunal accepts the claim.
Although there are no categories of persons exempt from paying the new fees, the government will introduce a fee remission system to ensure that access to justice is maintained. The full details of the remission system are still to be confirmed, as there is an outstanding consultation (which closed on 16 May http://www.morgan-cole.com/ Expertise | Experience | Efficiency | Contribution 2013) which the Ministry of Justice has yet to report on. The proposals in the consultation would mean that claimants who pass two financial tests will be entitled to receive a full or partial remission of any fees payable. The first test considers household disposable capital (generally savings and investments, but excluding your first house and pension). The proposed second test is complex, but broadly considers gross monthly income with set income thresholds of between £1,085 and £1,735 dependant upon whether the applicant is single, part of a couple, and whether there are any children. Applicants passing the first test, and falling below the relevant threshold in the second test will be entitled to a partial or full remission of the fee. It is proposed that job seekers will be deemed to pass this second test.
The introduction of fees is controversial and many organisations have expressed their concerns about access to justice for those with genuine concerns about their employment. Unison, with 1.4 million members announced on their website on 17 June that if the Ministry of Justice did not revoke the legislation, it would lodge proceedings with the High Court for a judicial review. That application has now been made. Unison are concerned that the introduction of fees will make it difficult for employees to exercise their employment rights because in some circumstances the fee to be paid may be greater than any potential compensation. In addition, the fee structure amounts to indirect discrimination and will have an adverse and disproportionate impact on women who often earn less than men. Finally, Unison are of the view that there has been no proper assessment of the public sector equality duty and the impact of the introduction of fees on individuals with "protected characteristics" who may now decide not to pursue a claim. Unison have confirmed that they will support its members involved in Employment Tribunal cases and it is reported that Unison’s national executive council have decided that a remission application will be submitted with each claim and an advance of the fee will be loaned to the member which they will seek to recover from the other side. But it’s not just Unison. A firm of Scottish solicitors has just announced that it has made an application for a judicial review at the Court of Session in Edinburgh to challenge the introduction of fees in Scotland. Like Unison, it is of the view that imposition of fees will limit access to justice particularly in the context of equal pay claims where claimants are likely to be low paid women.
Whilst the introduction of fees may reduce the number of claims in the long-term, there may well be an increase in claims being lodged ahead of 29 July. Additionally, as job seekers are deemed to pass the second test, unemployed potential claimants with insubstantial savings may be tempted to delay finding alternative employment until they lodge their claim. Furthermore, as the fee is an expense incurred by the claimant, employers should also bear in mind that settlement negotiations could result in higher sums being agreed as claimants may insist that any Employment Tribunal fee incurred is included in any settlement reached.
Changes to the Employment Tribunal Rules
Note also that on 29 July a number of new procedural Rules come into force where the respondent receives a copy of the claim form on or after that date. These changes will be considered in our Summer 2013 newsletter.