Back in July 2013 the Conservative, Liberal Democrat Coalition government introduced Employment Tribunal and Employment Appeal Tribunal fees. This was a first in the Employment Tribunal system and was short lived – with fees being removed in July 2017 following a successful challenge by Unison in the Supreme Court.
The topic of Employment Tribunal fees is now back on the table following the government’s opening of a consultation paper, which is seeking feedback on whether to reintroduce fees in the Employment Tribunal and Employment Appeal Tribunal. Natalie Wood, Associate Solicitor discusses.
The timeline of Employment Tribunal fees
Many will remember that issue and hearing fees were introduced in the Employment Tribunal system in 2013. The aim of introducing these fees was to reduce the number of weak cases in the Employment Tribunal system amidst criticism that the system was skewed in favour of the claimant. Following the introduction of Employment Tribunal fees (which required prospective claimants to pay between £390 and £1200 depending on the type of claim) and Employment Appeal Tribunal fees (which required prospective appellants to pay up to £1600), the number of claims brought in the Employment Tribunal system dropped substantially, dropping by over 50% in the first 12 months.
In 2017 the Supreme Court held that the level of fees imposed by the government were unlawful, that they interfered with access to justice and that the government had acted unconstitutionally in making the decision to introduce the fees. The Supreme Court also held that the fee structure was indirectly discriminatory against women and individuals with protected characteristics who were likely to bring Type B claims (which were claims branded as being more complex, e.g., discrimination) as these attracted a higher fee rate.
On 29 January 2024, the government launched a Consultation Paper seeking views on whether to reintroduce fees, although notably at a more modest level, of £55 per Employment Tribunal claim and £55 per Employment Appeal Tribunal claim. There are some exceptions to this – including for those who can genuinely not afford the fees and also in respect of a limited number of claims, e.g., claims in respect of failure(s) to collectively consult in large scale redundancies.
The government’s rationale is that Employment Tribunals provide a crucial service to individuals, and the introduction of fees will ensure that users of the Employment Tribunal and Employment Appeal Tribunal system pay towards the running costs of it. According to the government’s open consultation paper, the direct costs of running the Employment Tribunal and Employment Appeal Tribunal were circa £80 million in 2022/2023 – costs which are currently footed by taxpayers. In addition, taxpayers are also largely funding services provided by the Advisory, Conciliation and Arbitration Service (ACAS), which received around £58 million in funding in 2022/2023. The other key rationale for reintroducing fees is that it may incentivise parties to settle disputes in the ACAS process (so early on) and therefore avoid the need for lodging a claim in the Employment Tribunal at all (and presumably therefore easing the administrative burden on the employment Tribunal).
The impact of Employment Tribunal fees
There has already been some public criticism of the consultation, including that the reintroduction of fees will make it harder for working people to seek justice, and that it will be harder for them to bring claims where they have faced discrimination, unfair dismissal or if they have had wages withheld. Moreover, comparisons have been made to the last time fees were introduced and the fact it resulted in a significant drop in tribunal claims being issued.
Whilst that might be the case, there are some important things to note with these current proposals. The first is that the fees being proposed (£55 per claim) are significantly lower than the fees previously proposed, and therefore the risk of individuals being barred from justice on account of not being able to afford the issuing fee is likely to be low. In any event where an individual cannot afford the fees, they may be eligible for full remission of the Employment Tribunal and/or Employment Appeal Tribunal fee. The second is that depending on which Employment Tribunal system a claim is presented in, currently, parties may have to wait for several months to over a year for their case to be heard. Both sides can find themselves stuck in limbo for substantial periods of time, waiting for a resolution. There is an argument to suggest that additional funding could remedy this, and in turn mean parties get a speedier resolution. Thirdly, unlike the fee structure introduced in 2013, the proposed fee structure this time is far simpler. It will be applied on a uniform basis and therefore the risk of there being an adverse impact on certain individuals (i.e., persons bringing claims under the Equality Act 2010) is also low. Fourthly, by reintroducing fees, the Employment Tribunal system will somewhat mirror the approach taken across other courts and tribunals in our judicial system (where issuing fees can reach up to £10,000 depending on the type of claim being brought, so in many ways, it is a sensical step to take).
The consultation period is open and closes on 25 March 2024. You can also participate.
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