Her Majesty’s Courts and Tribunal Service has recently announced that fees for employment tribunal claims will be introduced on 29th July 2013, subject to parliamentary approval.
Until now there has been no charge for starting or continuing claims in the employment tribunals (which have been with us for over 30 years).
Claimants will now have to pay an issue fee of £160 for straightforward money claims (such as claims for arrears of pay or holiday pay) and a hearing fee of £230. (Level 1)
For unfair dismissal claims, and other more complex claims including discrimination, there will be an issue fee of £250 and hearing fee of £950. (Level 2).
Some people will be exempt from fees as on the same basis as in the county court (although note that in future anyone with savings of over £3,000 may have to contribute at least part of the fee).
It is difficult to predict what effect the introduction of fees may have upon the number of tribunal claims, although most stakeholders expect a fairly significant reduction.
Certainly the introduction of the lower, Level 1 fees, may make many claims that are worth say a few hundred pounds, uneconomic to pursue.
Total fees of £1,200 to bring an unfair dismissal claim may put a number of people off, especially those on low incomes but who have some savings that disqualify them from a fee exemption.
Claimants who are backed by trade unions or by insurance policies are likely to be less affected, although in all cases the payer is likely to be looking carefully at the prospects before agreeing to back the case.
High value discrimination cases may be less affected although the government is no doubt hoping that the fees will deter those with weak claims that can still take up a great deal of tribunal resource. However, as at least one commentator has pointed out, the fees are more likely to deter those with no money than with no prospects!
The tribunal will be able to order that the Employer reimburses the fee to the Claimant if the case is successful.
Employers and employees are likely to consider the effect of fees tactically. For example, an employer may be less likely to settle claims before proceedings are issued and may wait to see if the Claimant is prepared to pay the fee and start the claim. This factor may in itself have an impact upon the introduction of ACAS-led pre-claim conciliation, which is due to be introduced in 2014.
Likewise an employee who has paid a hearing fee will be less likely to settle at that point unless the cost of the fee is to be part of the settlement.
Judicial mediation will remain available for discrimination cases but at a cost to the Respondent of £600 (a price that may still be worth paying by an employer faced with a multi-day, complex case involving a number of people).
Taken together with other changes to employment law claims, the introduction of fees is something of a sea change for employment tribunals which both employers and employees will need to view carefully.