Tribunal fees

Perhaps the most damaging of all the coalition’s changes to employment law is the planned introduction of tribunal fees. From around July 2013, a claimant will have to pay a fee to issue a claim in the employment tribunal, followed by a separate fee to take the case through to a hearing.

Fees are to be paid by claimants only, not employers — a feature that was opposed by two-thirds of the respondents to the government consultation. Fees are to be paid at two stages — when the claim is issued, and before the hearing. Additional fees will be payable for some applications to the tribunal, such as to reconsider a default judgment. The fees will be processed via an online service, which, according to the Ministry of Justice’s Digital Strategy, will be online by July 2013. There are no plans to equip tribunals to handle cash or to provide facilities to enable people to pay their fees at a desk. This is likely to contribute to delay, confusion and increased cost to the tribunal system.

Unions describe the introduction of tribunal fees as an outrageous attack on the poorest workers, which will impact the most on the most marginalised and disadvantaged groups in society, many of whom are women, disabled or from ethnic minorities. Charging claimants to use the tribunal represents a radical shift away from the role of tribunals as a cheap, accessible means of accessing justice.

In a 2013 survey of union legal services for Labour Research magazine, several large unions confirmed that they will fund the fees for members, while others reported that they had yet to decide how best to respond. Sarah Veale, Head of Equality and Employment Rights at the TUC, told Labour Research: “Unions will be carefully considering how they deal with the impact of these fees, but it could mean that in future they will only take cases, for instance, which stand a more than 50% chance of winning”.

In April 2013, the draft Employment Tribunals and Employment Appeal Tribunal Fees Order 2013, setting out the fees to be payable was laid before Parliament.

There will be two levels of claim for the purposes of tribunal fees: Type A claims and Type B claims. These claims are identified in a Schedule to the draft Fees Order.

No claims are exempt, even those which are equal to, or less than, the value of the fee. There are to be no refunds, even if a case settles immediately. In practice, the presence of fees and the structure of the fee mechanism is likely to act as a significant bar to settlement and an incentive to employers to hold off from settling the claim until the last moment, waiting to see whether the employee is serious enough about the claim to pay the fee.

Type A Claims: these are generally for sums due on termination of the employment, such as unpaid wages, notice pay and redundancy pay, and other claims such as the right to paid time off to attend ante-natal appointments or to exercise the statutory right to be accompanied. Level 1 Claims will attract an issue fee of £160 and a hearing fee of £230.

Type B Claims: These include claims such as unfair dismissal and discrimination and will attract an issue fee of £250 and a hearing fee of £950.

Special rules are proposed for multiple claims. These rules are exceptionally complicated and will require regulation. No refunds are contemplated. The government is even introducing a fee for Judicial Mediation (£600), to be paid by the employer. Introducing the new fee structure, in April 2013 HM Court and Tribunals Service wrote that “fee levels have been initially set at less than full cost”, hinting at the possibility of even higher fees in the future.

The government proposes using an equivalent to the Civil Courts remission system to protect some claimants who cannot afford the fees. Consultation is ongoing. Entitlement to fee remission for most claimants is likely to be linked to receipt of certain benefits, for example income-based Job Seekers Allowance. A draft of the proposals for remission is attached as Schedule 3 to the draft Fees Order.

The sanction for non-payment of the fees will be that the claim will not be allowed to start or continue in the tribunal. The government has conceded that claims are to be treated as lodged in time if they are accompanied by a fee or an application for remission, supported by documentary evidence of disposable income and entitlement to benefits, even if the application is not processed until after the deadline date for the claim, and even if it is later decided that the claimant does not qualify for remission. Nevertheless, given the very short (usually three month) time frame for bringing a tribunal claim, linking entitlement to fee remission to eligibility for a benefit such as JSA is likely to cause practical problems for any potential claimants who are unable to show that they qualify for JSA in the weeks immediately following an unfair or discriminatory dismissal. It will undoubtedly result in more people giving up on their claims.

It is not yet known how fees are to interact with plans in the Enterprise and Regulatory Reform Act 2013 for compulsory pre-action conciliation of all claims through Acas (see page 25). Although fees are to be introduced in July 2013, compulsory conciliation will not become law until Spring 2014.

The tribunal will have discretion to order the “losing” party to pay the fee of the “winning” party. However, since research by the Ministry of Justice into the enforcement of tribunal awards in England and Wales (May, 2009) has demonstrated that 39% of tribunal awards are not paid at all and that 8% are paid only in part, the prospects of having the fee refunded are in practice slight.

Tribunals do not have power to enforce any of the orders they make, as to either awards or costs. Separate enforcement proceedings must be brought in the county court. There is no plan to introduce an enforcement power to enable a claimant to recover these fees. This means that even if a tribunal makes an order against the employer, if the employer refuses to pay it the claimant will have to incur further fees and embark on a fresh set of proceedings to enforce it.