Wednesday, August 1, 2012

Charging Fees in Employment Tribunals and the Employment Appeal Tribunal

For our UK readers here is a piece on Employment Tribunals that you may find useful.

The Ministry of Justice recently confirmed that fees will be introduced in the summer of 2013 for users of Employment Tribunals and the Employment Appeal Tribunal, in a bid to encourage mediation as the preferred way to settle disputes between employers and employees. The Government conducted a public consultation on its proposal to introduce fees, as part of its Employment Law Review, and the outcome of this is summarised below. The purpose of this consultation was not intended to identify whether the principle of charging fees was well supported as the Government had already announced, with full reasoning, its intention to introduce these fees.

The jurisdiction of employment tribunals expanded from their initial purpose and now they embrace a large number of different types of claims that arise from employment situations. At present a claim to either an employment tribunal or to the Employment Appeal Tribunal is free of charge and funded by the taxpayer and these fee proposals are intended to relieve some of the financial burden from the taxpayer and place it on the users of this service, if they can afford to do so.

What the fee structure will be? The

Government proposed two alternative fee charging structures for employment tribunals and the chosen one for implementation is a two-tier approach which has different fee amounts depending on whether it is a Level 1 or Level 2 claim. There are two payments within these Levels that are charged at different points along the claim; an issuing fee and a hearing fee and these are intended to encourage the parties to consider settlement outside of a tribunal.

  • Level 1 claims are for the termination of employment and include unpaid wages, payment in lieu of notice and redundancy payments. A £160 fee is charge to issue a Level 1 claim while a hearing fee, for a claim of this type, is charged at £230.

  • Level 2 claims include those which relate to unfair dismissal, discrimination complaints, equal pay claims and claims that arise under the Public Information Disclosure Act. Level 2 claims require a £250 issue fee and a hearing fee of £950.

The proposed fee levels for an Employment Appeal Tribunals include an appeal fee costing £400 while the hearing fee charged at £1200.

There is also a list of additional fees that have to be paid in particular circumstances and the most noticeable is a £60 charge, irrespective of the level of the claim, for an application to dismiss proceedings, following a settlement

This payment plan is hoped to encourage more responsible behaviour by tribunal users but it has been criticised by a number of respondents who predict that it will deter some of the UK’s most vulnerable workers from taking valid claims to court, pricing them out of justice.

The Government has also announced plans to extend the HMCTS fee remission system for civil courts in England and Wales to the employment tribunal fee structure.

This is a move to protect access to justice for those who cannot afford to pay the fee, or those who can only afford to make a contribution to it. Union leaders have voiced number of concerns about this remission system stating that it is woefully inadequate and workers are more likely to be mistreated now as bosses can flout the law without the fear of sanctions.

The agreed fees are payable by the claimant, but there was mutual agreement across all groups following the consultation that the unsuccessful party should reimburse these if the claimant is successful. The Tribunal has been handed this power and in such a case an order will be made that requires the unsuccessful party to pay the costs.

The payment of fees for this service may act as a disincentive for claimants to bring vexatious claims to tribunal and rather claims will be increasingly settled outside court.

Guest post by specialist personal injury solicitors Russell Jones & Walker / Slater Gordon.

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