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Impending Tribunal fees

As a result of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (“the Regulations”), the costs of both bringing and defending Tribunal claims are likely to increase.

Two tier system

The fee system is to be implemented on 29 July 2013 and will introduce a range of fees on a two-tier structure to reflect different levels of claim. The two tiers will be known as Type A and Type B claims. Type A claims will involve lower level and more straight forward claims such as claims for unlawful deduction of wages, a redundancy payment or breach of contract. The more complex claims are captured in Type B claims and include unfair dismissal, discrimination and whistleblowing.

Fees payable

From 29 July 2013 any individual claimants wanting to lodge proceedings will be expected to pay an issue fee of between £160-250 and a £230-950 hearing fee (if the case progresses to that stage) depending on the type of claim being brought.

However, the Regulations will also introduce fees associated with certain applications which will fall payable by whichever party is applying for the particular order. So, for example, an employer who wishes to have a former employee’s claim dismissed following withdrawal to avoid it being resurrected at a later date, will incur a fee of £60.

The table below sets out the fees that will be associated with applications that can be made based on the two different tiers:

Application                                                       Type A claim           Type B claim
Reconsideration of a default judgment                     £100                           £100
Reconsideration of a judgement                                £100                            £350
Dismissal of a withdrawn claim                                 £60                              £60
Employer’s counter contract claim                           £160                              Nil

There is also a significant flat fee for mediation, which is payable by the respondent, of £600.

Whilst it is unlikely to be of relevance to a majority of employers, fees are also being introduced in the Employment Appeal Tribunal; an issue fee of £400 and a hearing fee of £1,200 will be payable by the appellant where an appeal is issued on or after 29 July 2013.

What is the likely impact?

The government, and employers, will hope that the introduction of fees will act as a deterrent for potential claimants who are, perhaps, disgruntled with a former employer from lodging a claim in the hopes of achieving some sort of financial settlement out of the process – which is the often the case at present. There is currently no system to stop former employees bringing a claim, even where this is later shown to have no reasonable prospects of success or to be misconceived and thereby causing their previous employer to incur time and costs dealing with the claim. Often financial settlement is the result as the employer is forced to make a commercial decision to avoid expensive litigation costs. It is hoped that the new fees will, in conjunction with other elements of the new rules including an early “sift” of all claims, have the impact of reducing the number of unmeritorious claims.

The difficulty in achieving this outcome is that the government have also introduced a “remission” system to assist individuals wishing to bring a claim but who do not have the means to meet the set fees. The system very much reflects the remission system adopted in the civil courts and means that claimants will be able to apply for full or partial remission from fees in one of the following three ways:

– If they are receiving a qualifying benefit;
– If their (and their partner’s if applicable) gross annual income does not meet the relevant threshold; or
– If their disposable monthly income does not meet a set threshold.

On the basis that a majority of potential claimants will be unemployed it is highly probable that they will be in receipt of a qualifying benefit which includes jobseekers and work allowance, and working tax credit. Therefore they will be eligible for a remission (whether in full or part) which reduces the deterrent effect of the fees and does little to compliment the aim of the government’s reform.

Until the fee structure is implemented at the end of the month and its operation in practice can be assessed it is difficult to gauge how much of an impact the fees will have, but with the availability of remission from fees it is questionable whether the number of claims being brought will actually reduce in reality.

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