The long-awaited review of Employment Tribunal Fees
On 29 July 2013, the controversial step was taken to introduce fees in both the Employment Tribunal and the Employment Appeal Tribunal.
The fees were introduced with a threefold objective:
- financial: to transfer a proportion of the tribunal costs from the taxpayer to the individual (or at least those who can afford it);
- behavioural: to encourage the use of alternative resolution mechanisms where applicable; and
- access to justice: to protect access to justice for all.
The Ministry of Justice commenced a review of tribunal fees and has recently published its long-awaited, although arguably anti-climatic, ‘Review of the Introduction of Fees in the Employment Tribunals’.
In short, the review concludes that the introduction of fees has largely achieved its objectives. Tribunal users are now contributing between £8.5 million and £9 million a year towards employment tribunal system costs. This figure amounts to nearly 20% of the total cost of the employment tribunal system. ACAS has stated that it has seen an increase in the number of parties using the ACAS early conciliation process and it is reported that 48% of disputes in 2015/2016 were resolved using the ACAS early conciliation process alone and proceedings did not need to be issued. ACAS has identified a group of roughly 3000-8000 individuals who were unable to resolve disputes using the ACAS early conciliation process and who did not feel that they could afford to pay the fees to initiate proceedings. Despite these figures, the Ministry of Justice considers the third objective to have been largely met.
The review proposes two main changes to the fees:
- the fee for claims to the National Insurance Fund in respect of statutory payments due where an employer is insolvent will be waived with immediate effect. Charging a fee in such circumstances is not appropriate and the fee is unlikely to be reimbursed in any event. Hearing fees will not be charged for claims issued before 31 January 2017 and if fees were erroneously taken for exempt claims, they will be refunded. Any issue fees paid before 31 January 2017 will not be refunded; and
- to increase the earnings threshold for the fee-remission scheme to those earning a full time national living wage (£7.50 per hour as from April 2017). There will be allowances made for individuals who are living as a couple and for individuals with children. This is currently only a proposal and the consultation on this proposal will run until 14 March 2017.
Although the change in relation to National Insurance Fund claims is substantial, such claims account for only a small percentage of total claims. There will also likely be a large proportion of potential claimants who will be working above national living wage but who cannot realistically afford to pay the employment tribunal fees. It remains to be seen what impact these proposals will have in practice.
For more information contact our employment team on 0345 070 6000.