Re-introduction of Employment Tribunal fees?
There are already a host of new employment law developments in 2024 but there may be one more to add to the list. In a surprise announcement on Monday 29 January, the Government launched a consultation exercise on introducing fees in the Employment Tribunals (ETs) and Employment Appeal Tribunal (EAT). Strictly speaking that should be re-introducing!
The consultation period ends on 25 March 2024. If implemented, fees may become payable from November 2024.
By way of a reminder, and to some controversy, the Government introduced fees in the ET and EAT in July 2013. ET claims were categorised into two types and there was both an issue fee and a hearing fee. “Type A” claims were for simple disputes and the fees totalled £390. “Type B” claims were for more complex claims (such as discrimination) and the fees totalled £1,200. The EAT fees were £1,600.
The introduction of fees was challenged by Unison and in July 2017, the Supreme Court held that the fees regime was unlawful and prevented access to justice. They were unaffordable for many claimants and were disproportionate for low value claims. Significantly, the fees structure was indirectly discriminatory against women and individuals with protected characteristics who were more likely to bring discrimination claims.
Why has the Government decided to consult on introducing fees and what are the proposals?
The reasons for introducing fees
The direct running cost of the ET and EAT was around £80 million in 2022/23. In addition, the Acas early conciliation service received £58 million in funding in 2022/23. The intention is to relieve some of the cost borne by taxpayers by introducing modest fees.
It is thought that having to pay a fee may incentivise parties to settle their disputes early without resorting to proceedings.
Finally, fees are charged in other courts and tribunals so there would be consistency if fees were introduced in the ET and the EAT. The Government accepts that recovering the full cost of the service might not always be possible. However, users who can afford to pay a fee, should do so.
The proposals
The Government recognises that the fees introduced in 2013 “did not strike the right balance between meeting the policy objective for claimants to meet some of the costs of the ET and EAT and protecting access to justice“.
The principles of affordability, proportionality and simplicity are the key elements of the proposals.
- The Government is proposing a £55 issue fee for a claimant bringing an ET claim. Where there are multiple claimants, the fee is still the same and the fee could be divided between all the claimants.
- There will not be a separate hearing fee.
- The current fee remission scheme, Help with Fees which is available to users who cannot afford to pay a fee, will be extended to individuals bringing proceedings in the ET or EAT (if fees are introduced). A remission may also be available under the Lord Chancellor’s Exceptional Power to remit fees.
- No fee will be payable where proceedings are brought to establish a right to receive a payment from the National Insurance Fund (where for example, the employer is insolvent).
- The Government is proposing a £55 fee payable on lodging an appeal in the EAT. This would be for each judgment, decision, direction or order of an ET being appealed.
Comment on employment tribunal fees
It is the Government’s view that the proposed fee structure is simple for users to understand and easy to administer. There is only one type of fee for the ET stage and one for the EAT stage.
It recognises that “it is vital that fees must not prevent claims from being brought by making it unaffordable for those with limited means“. Accordingly, the level of fees would be broadly affordable and proportionate to the remedy being sought. Arguably however, the sum of £55 would not be enough of an incentive for someone to settle their dispute rather than bring an ET claim.
The Government estimates that the proposed fees could generate £1.3-£1.7 million a year from 2025/26 onwards, with an estimated income of £0.6m-£0.7m from implementation in November 2024 to March 2025. This would be a very small contribution to running costs.
In comparison to the level of fees introduced in 2013, it is unlikely that there would be any legal challenge to the current proposals on the basis of affordability and access to justice. However, time will tell and we will keep you updated.
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