Are Employment Tribunal fees making a comeback?
The introduction of employment tribunal fees in July 2013 led to a significant decrease in employment tribunal claims.
Despite those fees being quashed in 2017, following a decision by the Supreme Court, employment tribunal fees may now be making a comeback.
The 2013 – 2017 fee regime
Currently, when a claimant wishes to issue a claim in either the Employment Tribunal (ET) or Employment Appeal Tribunal (EAT), there is no requirement to pay a fee. However, a fairly complex fee regime was in place between July 2013 and July 2017.
- For Type A claims, which covered simple disputes, an issue fee of £160 and a hearing fee of £230 was payable
- For Type B claims, which covered more complex disputes, an issue fee of £250 and a hearing fee of £950 was payable
- For an appeal to the EAT, a £400 issue fee and a £1,200 hearing fee was payable
The introduction of these fees led to a substantial fall in the number of claims brought to the ET. Case volumes fell by 53% in the first 12 months.
In July 2017, following the Supreme Court decision in R (Unison) v The Lord Chancellor, employment tribunal fees were quashed as it held that the fees were unlawful. They were held to be unaffordable and to make issuing low value claims futile, which effectively prevented access to justice.
The fee structure was also found to be indirectly discriminatory against women and individuals with protected characteristics. Since the fees were quashed, the number of claims issued in the ET has increased.Government consultation
On 29 January 2024, the Ministry of Justice (MoJ) launched a consultation on introducing a new fee for all ET claims and EAT appeals.
If introduced, a fee of £55 will be payable on presenting a claim to an ET or lodging an appeal with the EAT. In contrast to the 2013 – 2017 regime, claimants will not be required to pay an additional hearing fee.
The MoJ has taken into account the outcome of the Supreme Court case and commented: “The Ministry of Justice recognises that the fees introduced in 2013 did not strike the right balance between meeting the policy objective for claimants to meet some of the costs of the ET and EAT and protecting access to justice.
“Therefore, in developing the fee proposal subject to this public consultation, careful consideration has been given to the lessons learned following the Supreme Court judgment, especially in relation to affordability, proportionality and simplicity as the three key principles underpinning a fair and balanced approach to setting fees in the ET and the EAT.”
The MoJ states that it has endeavoured to ensure that the fees proposed in the consultation are proportionate and affordable. If the fees are introduced, a fee remission scheme (Help with Fees) will be available to provide individuals on low income and with little to no savings, with financial support towards the cost of paying the fee. The consultation closes on 25 March 2024 and the consultation suggests that, if implemented, fees may become payable again from November 2024. Comment
It is not surprising that the government is revisiting the prospect of introducing ET fees given that fees are charged in other courts and tribunals.
In addition, the MoJ reports that the cost of administering the tribunal services (around £80 million in 2022/23) is borne entirely by the taxpayer and that there is a further cost to the taxpayer for ACAS conciliation services.
The MoJ’s rationale for the introduction of fees is that it is intended to relieve some of the cost to the general taxpayer by requiring tribunal users to pay for the tribunal system, where they can afford to do so.
If fees are introduced at the level being considered by the MoJ, it’s unlikely that we will see the same reduction in claims as we did in 2013.
However, the MoJ does comment that modest fees may incentivise parties to settle their disputes early through ACAS without the need for claims to be brought to an ET. This would not only add value for taxpayer money that is spent on providing this service, but also help alleviate some of the pressures the ETs are currently facing.
For forecasting purposes, the MoJ has estimated that there will be a 20% reduction in claims issued.
The latest in expert advice
Sign up to our newsletter for the latest insights and events from AfterAthena.