Employment Tribunal Fees Now Apply

Proposed two years ago and a year after they were first announced, fees for employment tribunals finally come into place today.

Employment Tribunals are now on a fee basisFees for employment tribunals (ET) have been introduced and come into force today in a move that is geared towards shifting the responsibility of payment away from the taxpayer and onto the users of the tribunals service. Additionally the introduction of such fees is intended to reduce the number of weak and speculative claims.

With employment tribunals introduced in the 1960s this is the first time that they have been subject to a fee.

Now, in order to lodge a claim, complainants will have to pay a fee for starting the claim (the "issue fee") and then further fees when the case goes to hearing (the "hearing fee").

The level of fee is variable upon the type of claim being made with claims for unpaid wages or disputes over redundancy payments having an issue fee of £160 and more complicated issues such as claims against unfair dismissal being £250.

Under the previous system the burden of payment was at the taxpayer’s expense and the tribunal service was costing an estimated £84 million annually but also tie up small businesses when they have to divert attention from the day-to-day running of their ventures to defending themselves in ETs.

Recent research, published by the Forum of Private Businesses has found that its member employers spend an average of 12 hours per month on employment compliance with that burden being shouldered by 90% of SMEs.

Tribunal Fees Welcomed by Business Groups

The Forum of Private Business (FPB) has welcomed the news of fees for tribunals, saying that it is a good method of filtering out vexatious claims. The business group prefer that disputes are settled internally rather than going to tribunal, saying that between 80 and 85% of disputes were settled in this way.

The FPB does however, believe that the reforms do not go far enough. The Forum’s Chief Executive Officer, Phil Orford, said of the new regime:

“Escalating workplace disputes to the tribunal stage is too easy an option for many employees. The burden on the employee is limited whilst employers are not only defending the case in question, but also the reputation of their business. Hopefully the introduction of fees will make claimants think more carefully before resorting to litigation.”

Regarding the ease with which claims could previously be made, Orford added:

“Our members recognise that employment law is there to protect both the employee and the employer. But when weak and vexatious claims are being made against employers the system is being abused at considerable expense to small businesses employers; they do not have the time, resources or the money to defend vexatious claims and in many cases should not have to.”

And Others Say No to Tribunal Fees

The union Unite were quick to condemn the move to fee-based employment tribunals saying that the full cost of the hearing of an ET would be a £1,200 upfront fee for workers.

Unite has pledged to pay the employment tribunal costs of its members.

Len McCluskey, Unite’s General Secretary, said of the latest development:

“What we are seeing today is injustice writ large as this worker-bashing government takes a sledgehammer to workers’ rights – this is a throwback to Victorian times.”

McCluskey continued, adding:

“Seeking redress for unfair dismissal and discrimination and other injustices in the workplace is a fundamental human right – but now ministers are putting up insurmountable financial hurdles for working people in pursuit of justice.”

“We estimate that this will affect 150,000 workers a year. This is not an aid to economic recovery but a means to keep working people frightened and insecure.”

Unison will be seeking a judicial review of the new fees system, which is to take place in October.

Up to March 2012 some 186,000 claims were handled by the Ministry of Justice with around 27% of of those claims settled out of court or withdrawn. Small businesses were still liable to pay for their legal costs even in the cases where they won.

For further details see HM Courts & Tribunals Service for claims and fees.

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