31/05/2013

Employment e-Brief – Employment Tribunals Claims Issue fees introduction date confirmed

HM Courts & Tribunals Service has confirmed this week that fees in the Employment Tribunals are to be introduced from 29 July 2013. A claimant or appellant will be required to pay an “issue fee” on submitting their claim or appeal, and a “hearing fee” before the full hearing. Tribunals will have the power to order the unsuccessful party to reimburse fees paid by the successful party.

With the proposed fees for unfair dismissal cases at £250 for issuing the claim and £950 for the hearing, a dismissed employee with only £3,000 in savings and no household income would have to gamble over a third of their savings on tribunal fees at a time when they need the money to live on. Those with less than £3000 in savings and low income will not be required to pay any fee. Given that the median unfair dismissal award in 2012 was only £4,500, the expectation is that many dismissed employees may simply decide that they cannot afford to seek justice. Whether or not unions will stump up the fees for their members is not known, so perhaps there will be an increased take up of personal legal expenses cover to fund the claims.

Employers are likely to see a shift from employees keen to issue proceedings early to a situation where aggrieved employees will negotiate for longer and leave issuing to the last minute in order to save the outlay. This is certainly what has happened in the civil courts over time where increased fees have been the norm for many years.

Another concern is that this may impact employers whose insurance cover only “kicks in” once a claim is issued so it will be interesting to see how things develop. The Government’s impact assessments focused upon the likely savings to the taxpayer of administering the tribunal system.  There is less confidence it seems about the reduction in actual tribunal claim numbers but undoubtedly there will be a reduction and this development must be good news for hard-pressed employers eager to avoid claims.

For more information please contact Philip Paget or any member of the Employment Law Team.