Introduction of employment tribunal fees

Subscribe to Business Support news feeds

Published

As we reported in earlier HR briefings, last year the Government announced plans to introduce fees in the employment tribunal and employment appeal tribunal. Fees for using the tribunal system will be introduced for the first time by the end of July 2013.

Overview

An overview of the fees structure is as follows:

  • The person who files the claim or seeks the order initially pays the fee;
  • The amount of the fee depends upon the nature of the case, the stage in the proceedings and for multiple claims, the number of claimants;
  • Fees will be due both at the time of issuing the claim and then shortly before the final hearing; and
  • The tribunal will have the power to order that the unsuccessful party reimburses the fees paid by the successful party.

Amount of the fee

Type of application

Type A claim – generally for sums due on termination such as unpaid wages, payments in lieu of notice and redundancy payments

Type B claim – claims relating to unfair dismissal, discrimination complaints, equal pay and whistleblowing

ET Issue fee

£160

£250

ET Hearing fee

£230

£950

EAT issue fee

£400

£400

EAT hearing fee

£1,200

£1,200

Where there is more than one claimant the fees increase, for example, the issue fee for a type A claim with between 2- 10 claimants is £320 and the hearing fee is £460.

The employer will also have to pay a fee of £160 if it files a counter claim.

Failure to pay

Failure to pay these fees (or prove eligibility for remission, see below) will result in the discontinuation of the claim or appeal.

Remission system

Not everyone will have to pay the fees, as a remission system is applicable which is designed to ensure that access to justice is maintained for those individuals on lower incomes.

The current fee remission system administered in the civil courts will be applied to the employment tribunal fee structures for the time being until a new system is introduced later this year, see below.

Full remission of fees - receipt of qualifying benefit

There is a full fee remission for those applicants in receipt of a ‘qualifying benefit’. Essentially these include income support, working tax credit (provided that no child tax credit is being paid to the applicant), income-based jobseeker’s allowance and income-related employment and support allowance.

Full remission of fees - gross annual income

There is also a full fee remission for those applicants whose gross annual income is lower than the following thresholds, having regard to the number of children the applicant has and his marital status.

Number of children of applicant

Single

Couple

No children

£13,000

£18,000

1 child

£15,930

£20,930

2 children

£18,860

£23,860

If the applicant has more than 2 children then the relevant amount of gross annual income is the amount specified in the table above for 2 children plus the sum of £2,930 for each additional child.

Full and part remission of fees - disposable monthly income

There is a full or part fee remission based on an income and expenditure means test to calculate their monthly disposable income.

Disposable monthly income

Maximum fee payable

£50 or less

No fee

More than £50

The applicant will contribute £2.50 for each additional £10 income up to £919, and £5 for each additional £10 income over £919.

There is a comprehensive definition of what amounts to ‘disposable monthly income’ in the legislation, for example, no account is taken of cost of living expenses, tax paid, housing costs and childcare costs. The income of a partner, if any, is also included as income of the applicant.

Applications for remission in full or in part must be made at the time the fee is payable and must be supported by documentary evidence.

Reform of remission system

The whole remission system is being reformed and the Government has recently issued a consultation paper setting out its plans. The proposed new scheme will apply to the employment tribunal fees in the following way.

Two tests

The proposed remission system is based on an assessment of the income and disposable capital of an applicant and (with a few exceptions) their partner. It will have two distinct tests. The applicant will have to pass both tests in order to be eligible for a fee remission.

Disposable capital test - The first test will determine whether an applicant is eligible for a remission based on an assessment of their household disposable capital. Applicants with disposable capital in excess of the relevant threshold will not be eligible for a fee remission. The cap most likely to be relevant to the employment tribunal service will be a disposable capital threshold of £3,000 for ET fees and £8,000 in relation to EAT fees.

In simple terms, ‘disposable capital’ includes savings, investments and redundancy payments received. It excludes property value, unfair dismissal compensation and capital held in pension schemes.

Gross monthly income test - The second test will consider whether an applicant who passed the disposable capital test receives a full fee waiver, pays a contribution towards their fee or pays the full fee.

A full fee waiver will be granted if the applicant can demonstrate that their household income is below a certain threshold. Above the threshold the applicant would be required to pay a contribution towards the fee, up to the value of the fee, based on a percentage of their income in excess of the threshold, or the full fee where their income exceeds the threshold by £4,000.

Under the full remission element, gross monthly income thresholds are proposed for single people and couples, with a further allowance added for each dependent child.

Gross monthly income

Single

Couple

No children

£1,085

£1,245

1 child

£1,330

£1,490

2 children

£1,575

£1,735

Add £245 for each additional child

Receipt of qualifying benefits

As with the current system, recipients of certain benefits will be automatically deemed to fall below the threshold and applicants will receive a full remission if they also pass the disposable capital test, for example, recipients of Income support and Income-based Jobseeker’s allowance. Many of the state benefits will be consolidated in October 2013 into Universal Credit so we have not set out full details of the range of benefits here.

Evidence to support these tests

The applicant will need to show documentary evidence that confirms their income and capital resource (and, if applicable, that of their partner), for example the qualifying benefit from the DWP or three month’s bank statements and wage slips.

Remission consultation document

A full copy of the remission consultation document can be found here If you have any comments in relation to the proposed new system please email Tim Thomas, Head of Employment Policy

Author

Media Team 020 7654 1576

Other articles from this author >
Online payments are not supported by your browser. Please choose an alternative browser or make payments through the 'Other payment options' on step 3.