£1,200 price tag for bringing an unfair dismissal claim

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The Ministry of Justice has today confirmed that it will introduce fees for individuals who bring employment tribunal claims from the Summer of 2013.

Unlike in the civil courts, it currently costs nothing for an employee to lodge an employment tribunal claim. As a result, claimants risk little by lodging a claim under the current system. Since costs awards are rarely made, they have nothing to lose by taking a case all the way to a hearing (if they are not paying for legal representation).

The Ministry of Justice consulted on introducing fees earlier in the year and has now published its proposals to introduce fees for lodging an employment tribunal claim and taking it to a hearing. Its stated aims are to reduce the cost of running employment tribunals by transferring some of the cost to those who use the service and to encourage the early resolution of claims.

What will the fees be?

The fees proposed for single claims are as follows:

Level 1 claims

Sums due on termination of employment such as unpaid wages, payment in lieu of notice, redundancy payments

Level 2 claims

More complex claims such as unfair dismissal, discrimination complaints, equal pay claims and whistleblowing claims

Issue fee

£160

£250

Hearing fee

£230

£950

There are different rates for claims brought by multiple claimants. Fees will also be charged to employers/individuals who appeal an employment tribunal decision.

The Ministry of Justice will consult on the remission system this Autumn. They will look at how to assist those who cannot afford to pay some or all of the fee.

Not only will an employee avoid costs if they settle or withdraw before the hearing date, the fee for mediation by a judge of a level 2 claim will be half that of a full employment tribunal hearing.

EEF’s view

The introduction of fees is a move in the right direction. Fees are one way to encourage more responsible behaviour by tribunal users. We know that many of our members waste a lot of time dealing with speculative claims, which often end up being withdrawn or struck out.

However:

  • If the remission system results in most claimants paying little or nothing, then today’s announcement will have little impact. A sensible remission system is crucial.
  • The introduction of fees may push up the levels of settlement, since individuals will no doubt look to recoup any fee they have paid from their employer as part of any settlement agreement.
  • The employment tribunal will have the power to order an employer who loses a case to reimburse the fee to the successful party.

You should also be aware that there is also a proposal in the Enterprise and Regulatory Reform Bill, which will penalise employers who lose an employment tribunal claim in circumstances where there are aggravating features (as yet undefined). The fine could be as much as 50% of any financial award made to the individual, subject to a minimum of £100 and a maximum of £5,000. Like parking fines, there will be discount of 50% if the fine is paid within 21 days.

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Media Team 020 7654 1576

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