EVERYTHING COUNTS - EMPLOYMENT TRIBUNALS AND THE PROPOSAL TO REINTRODUCE FEES - BY SHONA CHRISTIE

The UK Government launched a consultation on a proposal to introduce fees for Employment Tribunal and Employment Appeal Tribunal claims on 29^th January 2024. This consultation is currently ongoing and will run until 25^th March 2024. This comes after the Coalition Government previously introduced fees between 2013 and 2017 which were ruled as unlawful by the Supreme Court. The intention on this occasion, as stated by Justice Minister Mike Freer MP is to, “Ensure users are paying towards the running costs of the tribunals and put its users on broadly the same footing as users of other courts and tribunals who already pay fees, thereby ensuring cross-jurisdictional consistency.”

The consultation proposes that the following fees will be introduced for Employment Tribunal and Employment Appeal Tribunal claims:

1. When a Claimant submits a claim at the Employment Tribunal, they will be required to pay a £55 fee. If there are multiple Claimants lodging one claim, the fee will remain at £55. It would, therefore, be the Claimant’s responsibility to divide their fee accordingly. There would be no additional fees from the Employment Tribunal – for example, a hearing fee. This means the £55 fee would cover the whole process for the Claimant.

2. When an appeal is lodged in the Employment Appeal Tribunal, the appellant will be required to pay a £55 fee. This fee is payable per judgement, decision, direction, or order of an Employment Tribunal being appealed.

There are exceptions which relate to proceedings in which a Claimant is establishing their right to a payment from the National Insurance Fund (NIF). Most claims to the NIF relate to payments made when an employer is insolvent, for example, a Protective Award.

The proposal also takes some note of affordability. The thresholds are, however, set low, and it is likely that individuals with disposable capital in excess of £4,250 or a gross monthly income of more than £1,520 will be required to pay the full fee.

This is not the first time that Employment Tribunal fees have been proposed and later enacted. In 2013, the then Coalition Government introduced fees under a fee order made by the Lord Chancellor at the time, Chris Grayling. These were subsequently ruled unlawful under the R (on the application of UNISON) v Lord Chancellor judgement.

The fees introduced in 2013 were significantly higher than the fees currently being proposed. In 2013, claims were split into two categories: Type A Claims (for example, a claim for unpaid wages) and Type B Claims (for example, a claim for unfair dismissal). Type A Claims incurred a cost of around £390. Type B Claims could cost in the region of £1,200. Employment Appeal Tribunal fees were higher, at £1,600.

UNISON, with the support of others, brought a legal challenge against the fees introduced. On 26^th July 2017 the Supreme Court ruled that the fee order introduced was unlawful for three reasons,

1. The fees introduced were, for many people, unaffordable;


2. The fees were of such significant value that it became futile for a person to pursue a low-value claim, which prohibited access to justice, and;


3. The fee structure was indirectly discriminatory against women and people with protected characteristics because there was a higher chance these people would be bringing a Type B claim, which had a significantly higher cost.

As a result, the Government was required to reimburse all fees paid between 2013 and 2017. Although this was a positive outcome, it was not able to mitigate the significant impact of fees from 2013 to 2017, as the current consultation acknowledges. The consultation reports that cases fell by around 53% from approximately 59,000 cases to approximately 28,000 cases in the year after fees were introduced. After the removal of fees, cases rose again from around 18,000 to approximately 33,000.

The Government estimates that if fees are introduced it could generate an income of £1.3 million to £1.7 million annually towards the cost of Employment Tribunals and Employment Appeal Tribunals. Currently, the estimated running costs of these Tribunals are £80 million annually. It is, therefore, questionable whether the income generated from the introduction of fees would have any significant impact on the current running costs.

Concerns have been raised by many groups representing workers, who fear the re-introduction of fees will inhibit people from lodging claims and may result in employers exploiting their workers. On 26^th February 2024, a Joint statement against employment tribunal fees was signed by 47 organisations, asking the Government to review their proposal.

It remains to be seen in light of this consultation whether the Government will choose to re-introduce fees in Employment Tribunals and Employment Appeal Tribunals. Whilst the Government has argued that consideration has been given to the UNISON Decision, the potential risks for access to justice remain, and the likely financial benefits appear limited. There are legitimate concerns about the effect of fees inhibiting access to Employment Tribunals and Employment Appeal Tribunals.

If you would like to respond with your opinion, the consultation is open until 25^th March 2024. Contact details and how to respond can be found at the end of the online consultation, available by clicking the attached link:  Open consultation Introducing fees in the Employment Tribunals and the Employment Appeal Tribunal.