Consultation on introduction of tribunal fees
Business owners have often lamented the apparent ease with which disgruntled staff can bring employment tribunal claims. Presently, there is no fee for an employee to lodge a claim in the employment tribunal and very little chance of them having to pay for the employer’s costs of defending the claim. As things stand, the full cost of tribunal administration is borne by the taxpayer, which last year came to £84.2 million, according to government figures.
However, the burden on the public purse is only one aspect of this issue. Many employers also believe that the lack of financial commitment involved in bringing an employment tribunal claim can encourage a minority of workers to pursue spurious claims (which can be difficult to get struck out) purely in the hope of achieving a pay-off. Such workers can represent themselves at the tribunal and have very little to lose in doing so.
In a move that will cheer many employers and human resources professionals, the government is consulting on proposals to introduce fees in the employment tribunal and its associated appeal chamber, the employment appeal tribunal. This move is in line with the coalition’s aim of promoting early resolution of workplace disputes with a view to cutting the cost burden of the tribunal system to the taxpayer.
The consultation is looking at two separate fee-charging schemes, but it seems clear that some form of fee will be introduced.
Under the first option, the level of fees charged would depend on the nature of the claim made and the stage reached in the proceedings. There would be two fees payable: one at the time the claim is lodged (the 'issue fee'); and the other before the hearing (the 'hearing fee'). This could encourage settlement of claims, thereby removing the need to pay the hearing fee.
For single claims, the issue fee would be between £150 and £250, and the hearing fee would be between £250 and £1,250. Both would be payable by the claimant. There would also be six further fees for certain specified applications, once a claim has been accepted, including a counterclaim on the part of the employer.
The second option would involve one main fee to be paid by the claimant at the issue stage, irrespective of whether the claim progressed to a hearing. This fee would range from between £200 and £1,750 for a single claim. As with the first option, there would be six further fees for certain applications made after the claim had been accepted. Under this proposal, the level of fees would depend on the value of the claim, as well as its nature and the number of people involved. The fee for claimants seeking to recover over £30,000 would be substantially higher than for those seeking an award below this threshold. Linking the fee to the damages sought may have the beneficial effect of encouraging early realistic assessments of damages claimed.
Whilst most would agree that opportunistic claims should be discouraged, the consultation raises an issue about access to justice for the financially disadvantaged. However, the consultation indicates that a fee remission system would be available to those who could not afford to pay the fee, for instance, people in receipt of Job Seekers Allowance.
Tribunals could also be given the power to order that the unsuccessful party reimburse the successful party, so that “the cost is ultimately borne by the party who caused the system to be used” meaning that there would be a much greater financial risk involved in bringing a claim.
Any contributions to the consultation should be made before the closing date of 6 March 2012.
Author: Jenna Hunter
Published: 15 December 2011