Employment Tribunal Fees – All Change

People often say “you don’t get anything in life for free nowadays” and from 29^th July that will also be true of Employment Tribunals.

From 29^th July 2013, it will not longer be free of charge for a Claimant to issue a claim against their employer in an Employment Tribunal. Instead (as in the civil courts already) Claimants will have to pay a fee for both issuing their claim and also for their claim to be heard at a hearing. The amount they pay will depend on the type of claim(s) brought. Claims can be divided into two types – Type “A” and Type “B” claims.

Type A claims consist of more straight-forward claims including wages claims, breach of contract claims, redundancy pay claims and holiday pay claims.

Type B claims consist of everything else, including unfair dismissal and discrimination claims.

The fees for each are as follows:

Type A – Issue Fee £160, Hearing Fee £230

Type B – Issue Fee £250, Hearing Fee £950

The hearing fee would be payable within 4-6 weeks before the hearing date. If there is a mix between Type A and Type B claims, for example a Claimant brings claims for unfair dismissal and holiday pay, the higher fees for Type B claims would apply. The Employment Tribunal will reject a Claimant’s claim if it is not accompanied by the appropriate fee.

There will be no fees for Respondents to defend claims but there will be fees for, for example, Judicial Mediation (£600) or bringing a counterclaim in response to a Claimant’s claim (£160).

The Employment Tribunal will have the power to order the losing party to reimburse the winning party for any fees incurred by them.

There will be exemptions for the fees for those on low incomes or the unemployed. Given that a lot of employees bringing unfair dismissal claims will be unemployed, the fee structure may be avoided in a large proportion of such cases.

Obviously employees (and their unions!) will be displeased with these reforms, but there is no doubt that these changes are good news for employers. They will inevitably reduce the number of claims brought to Employment Tribunals, and certainly a lot of “try on” cases which are brought by Claimants purely to try and get a pay off from their employer.

For claims that are still brought, Claimants may be more likely to settle earlier so as to avoid payment of the hearing fee. It may also encourage Claimants to settle future claims with their employers from the outset so as to avoid paying the issue fee.

Tactically, some employers may also try and delay any dismissals of employees (on the ground of redundancy, for example) in the near future until on or after 29^th July 2013 when the new fee structure will have already kicked in, so as to hopefully reduce the likelihood of any claims being brought. How the new fee structure will work in practice, however, remains to be seen.