The Government has now announced the implementation date - Monday 29 July 2013 - for the introduction of the payment of fees in relation to Employment Tribunal claims. A claimant will be required to pay an “issue fee” on submitting the claim and a “hearing fee” prior to the full hearing of that claim. There will be two levels of fee. There will be a £160 issue fee and a £230 hearing fee for claims for unlawful deduction from wages and certain other claims for sums due on termination of employment e.g. redundancy payments. There will be a £250 issue fee and a £950 hearing fee for unfair dismissal, discrimination and equal pay claims. This OnPoint summarises the new fees regime.

Executive Summary

The Employment Tribunals and the Employment Appeals Tribunal Fees Order 2013 will introduce fees into the employment tribunal system this summer. HM Courts & Tribunals Service has announced an intended implementation date of 29 July 2013 when a claimant will have to pay a fee both before issuing their claim and then at a later stage prior to the full hearing. Some of the key detail about how the fees regime will operate in practice is found in the newly revised Employment Tribunals Rules of Procedure, which also comes into force on 29 July 2013 (as Schedule 1 to the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013).

The purpose of introducing fees is to relieve some of the financial burden on the taxpayer by requiring users of the employment tribunals (and the EAT) to make a contribution to the cost of the service that they receive, where they can afford to do so. The Government expects to recoup approximately 33% of the tribunals’ costs with the current fee levels. The purpose of having a dual charging point system is to provide a second opportunity for parties to settle.

It is not yet clear what effect this will have on the tribunal system or the number of claims brought each year. While some commentators have predicted that the introduction of fees will deter claimants from bringing claims, others foresee no substantial impact on the number of claims being brought as claimants turn instead to alternative forms of funding such as contingency fee arrangements or legal expenses insurance. A separate objective of the new regime is to encourage early settlement of disputes. However, this objective may be undermined by when the hearing fee is due to be paid. Respondents may delay entering into meaningful settlement negotiations until a later stage in proceedings than might otherwise be the case to see if the hearing fee is paid, thereby indicating that the claimant has both the intention and means to actively pursue their case to a full hearing.

Procedural Impact

Only claims or appeals that are submitted on or after the implementation date will attract fees.

The Order requires a claimant to pay a fee at two stages in proceedings - initially when the claimant presents a claim form to an employment tribunal (the “issue fee”) and then at a second point prior to the hearing (the “hearing fee”).

The key procedural points to note about fees are:

• A tribunal will reject a claim if it is not accompanied by a tribunal fee or remission application.
• Where a party has not paid the relevant tribunal fee or presented a remission application, the tribunal will send the defaulting party a notice specifying a date for payment of the tribunal fee/presentation of the remission application.
• If the required payment is not made then:
  • If the fee is payable in relation to a claim, the claim is dismissed.
  • Where the fee is payable in relation to an application, the application is dismissed without further order.
  • Where the tribunal fee is payable in relation to judicial mediation, the judicial mediation will not take place. 
• In the event that the dismissal is of a claim or response, a tribunal does have the power to reinstate any claim or response.

The date for payment of the hearing fee will be set out in the tribunal’s notification of the hearing date.

A tribunal has the power to make an order that a tribunal fee be reimbursed by the opposing party where a party has paid a tribunal fee in respect of a claim, counter-claim or application and that claim, counterclaim or application is decided in whole, or in part, in favour of that party.

Types of Claims

No type of claim will be exempt from fees, irrespective of whether the claim includes a complaint of discrimination, is of low value or even is a claim where no financial remedy is sought.

Different fees will apply to different types of claims. In summary:

• Type A claims are supposed to require little or no pre-hearing work and be resolved in one hour at a hearing (e.g. claims of unauthorised deductions from wages, breach of contract, failure to pay redundancy payment or a complaint that the employer has failed to permit time off for trade union activities).
• Type B claims are all other claims and typically take longer to case manage and have longer hearings (e.g. claims of unlawful discrimination, whistleblowing or unfair dismissal).

Fees Due

The fee due will depend upon whether the claim is a Type A claim or a Type B claim. However, where a claimant lodges a claim which contains a number of different types of complaints, the fee due will be that which relates to the highest level claim, so that a claimant will only have to pay one fee.

The issue fee and hearing fee also vary depending upon whether there are multiple claimants bringing the action. 

However, the issue fee and hearing fee payable will be capped at the amount equal to the sum of the fees which the individual claimants would have been liable to pay as single claimants.

Certain applications will also attract fees, which the applicant must pay.

 
Finally, the Respondent will be liable for a fee of £600 where parties agree to pursue judicial mediation.

Payment of Fees

It will be possible to pay the relevant fees via the Ministry of Justice's online service or via the centralised processing centres (of which there will be one for England and Wales and one for Scotland). This will affect the way claim forms are submitted. Following the implementation date, a claimant will submit an online ET1 with the fee payment being taken online or they will need to present their ET1 and payment to the appropriate central office by post. After the fee has been paid/remission approved, the ET1 will be forwarded to the appropriate local tribunal.

Remissions

The HMCTS civil court remissions system will be extended to the tribunal system and made available for those individuals who cannot afford to pay part or all of any fee. As a general rule, claimants will be deemed to be able to pay unless they can demonstrate that they are unable to do so.

To be eligible for remission an individual claimant must provide proof that he or she is either in receipt of certain permitted state benefits or that his or her household income is below a certain threshold.

The Ministry of Justice is currently reviewing the remissions system and has proposed to introduce a two stage test for claimants seeking relief. Consultation on this recently closed and further detail will follow in due course.