Employment Tribunal Fees

The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, is set to end the practice of “no fees” being charged in the Employment Tribunals.

Any person who has ever issued a claim in court will know that fees must be paid at each stage, i.e upon issue, upon allocation to track, upon an application being made and upon the matter being listed for trial. The effect of this is that if a matter proceeds to trial fees of several thousand pounds are often incurred. The losing party will be ordered to pay the fees. Certain people on very low incomes do not need to pay fees.

The position in the Employment Tribunals and the Employment Appeal Tribunal has historically been that no fees whatsoever have been charged. It has been a totally free service. This is a peculiarity that the government in these times of austerity has decided to rectify and fees will very shortly be charged in the Employment Tribunal just as they are in courts.

There is some logic to this step. It costs much money to maintain the tribunal service and so why should its service be free to end users? Those who are on low incomes (which will include those who have lost jobs because of unlawful conduct of employer for example where an employee has been unfairly dismissed) will not have to pay fees, but most others will. If an “employee group” such as a trade union issues proceedings on behalf of a large group of employees then significant fees will have to be paid; why shouldn’t they?

The practice of paying fees may bring an end to vexatious litigants and claims with little merit and I suspect particularly those pursued by “employment consultants” who conduct employment claims on a “no win no fee basis”. The requirement to pay a fee is a good indication of whether somebody genuinely believes in their case or not. There may be some small impact upon employers but I doubt the liability to pay fees of a successful claimant will really be of much significance; I would expect employers in any negotiation to say that employees must pay the fees out of their damages and some employees will test the nerve of employees to see whether they are really willing to pay a trial fee.

The size of the fee is interesting. A letter from Jason Latham, Tribunals Deputy Director at Her Majesty’s Courts and Tribunals Service, suggests the fees will be set as follows:

“For single claims in the employment tribunal, a ‘Level 1’ claim will have an issue fee of £160 and a hearing fee of £230, and a ‘Level 2’ claim will attract an issue fee of £250 and a hearing fee of £950. For multiple claims, the issue fees range from £320 to £1,500 and the hearing fees range from £460 to £5,700. There are a further five fees, ranging from £60 to £ 600, for certain applications once a claim has been accepted, such as an application to dismiss following settlement or to issue a counterclaim.

In the EAT, the fee to lodge an appeal is £400 and £1,200 for it to progress to hearing.”

The exact fees will be known once the bill is published. It is understood it will come into force in the early summer (possibly late July 2013). It will not have retrospective effect and so will only apply to claims started after this date; the message is therefore clear – if you have a claim or an appeal get it in before the cut off date otherwise you will end up having to pay a fee at each stage of the claim.

In our opinion the costs of the fees will discourage many from issuing and many more from proceeding to trial. If the trial fee is refunded in the event of a trial not proceeding (as in the County Court) there would certainly be much merit in an employer waiting to see if an employee actually pays the fees before deciding to settle. Save for high earners, questions of reputation and the most serious types of discrimination, it has always in our opinion been questionable whether commencing an employment claim in the tribunal is commercially viable. These changes implemented by the government will only serve to increase further the doubt as to whether such claims are viable. There is a clear attack by the coalition government on the rights of employees (as is seen by the changes to legislation already made and the quite ridiculous employee shareholder scheme (which we shall comment upon next week)) in the guise of restoring equilibrium between employers and employees; whether or not you support the change really will depend upon whose camp you are sitting in.

Matthew Dillon