I am sure that many of you will remember the saga of Employment Tribunal fees – after first being introduced in 2013, they lasted until 2017 when the Supreme Court ruled that they prevented access to justice and were therefore unlawful.
This week we received the news that the Government is consulting about reintroducing fees for bringing Employment Tribunal claims. Although it is just a consultation at the moment, the way it is worded suggests it is highly likely that fees will be coming back, and probably soon!
The new proposals are different from the previous regime as the Government says it has carefully considered the Supreme Court’s decision. We bring you the key points from what is now being proposed.
The fee will be £55
One of the things that led to the downfall of the previous fee system was that it was found to be too expensive, and therefore caused problems to those who had genuine claims but could not afford to bring them. When fees were first introduced in 2013, the number of claims went down by around half.
To try to address this problem, the Government is proposing one flat fee of £55 for Employment Tribunal claims, which it describes as ‘modest’. (As a comparison, the 2013 fee for issuing a discrimination claim was £250, with a separate fee of £950 if the case went to a final hearing, i.e. a total of £1,200.)
The idea is that the fees will make some contribution towards the costs of running both the Employment Tribunal system and the ACAS early conciliation process. However, they won’t really go anywhere near covering the cost. It is thought that the new fees would generate around £1.3 to £1.7 million per year, but the Employment Tribunal system costs around £80 million per year.
It will be one fee whatever the claim, and will cover the whole claim
The previous rules had different levels of fees depending on the complexity of the case, and also required a separate fee for when a case went to a final hearing.
The Government says it is keen to make the new fee regime simple to administer, and therefore the £55 fee will apply regardless of the type of claims being pursued. Interestingly, in cases where multiple Claimants are bringing claims at the same time, the claim fee would still only be £55 in total.
The fee would also cover the whole of the claim’s journey through the Employment Tribunal system, so once the claim fee has been paid at the outset, there would be no further fees to pay. The consultation doesn’t mention what would happen if an employer makes a counterclaim, so we assume that there are no plans to charge a separate fee in that situation.
There will be help for those who can’t afford the fees
As was the case previously, support will be available for those who are not able to afford the fees. The system is called ‘Help with Fees’ (HwF) and is already operating in other types of case.
Fees won’t apply to claims from the National Insurance Fund
The main exception from the fees that would apply is that if someone needs to claim certain payments (such as a statutory redundancy payment) from the National Insurance Fund because their employer has become insolvent, then they will not be required to pay the fee.
When will this apply?
The consultation was launched on 29 January and is due to last until 25 March. Reading through the proposals (which are available here), although the consultation of course invites comments from interested parties, it does seem highly likely that the fees will be implemented, and I expect that the Government would want to do so as quickly as possible. We will of course keep you updated on developments in our future ebulletins.
What will the effect be?
The impact of these fees will be much less dramatic than the 2013 version because this time the fee has deliberately been set at a “modest” level that would not create a barrier for most people who are thinking of bringing a claim.
Where claims succeed, the employee will be able to claim the £55 from the employer.
However, at a time when Employment Tribunals are still battling with large backlogs, it remains to be seen whether they have sufficient resources to manage the additional administration that will be involved in dealing with the new fees.
If you would like advice on an Employment Tribunal claim, please contact any member of our Employment Team who will be happy to help.
Please note that this update is not intended to be exhaustive or be a substitute for legal advice. The application of the law in this area will often depend upon the specific facts and you are advised to seek specific advice on any given scenario.