Is the Government’s new employment tribunal fees structure simply a recipe for confusion and injustice?

Pattinson & Brewer employment specialist Paul Statham voices serious misgivings over the new employment tribunal fees structure that the Government will bring in on 29 July, 2013… 

Paul_StathamOn 28 May 2013 HM Courts & Tribunals Service, in a letter to stakeholders, announced that they were ‘pleased to confirm’ that fees will be introduced in the employment tribunal (ET) and Employment Appeal Tribunal (EAT) for all cases or appeals started on or after 29 July 2013.

The following fees will become payable by the claimant in all ET cases:

  • Level 1 claims will cover straightforward claims such as unpaid wages, redundancy pay, holiday pay and notice pay. The issue fee to start the claim is £160 and the hearing fee is £230.
  • Level 2 claims will cover all other claims such as unfair dismissal, discrimination, equal pay and whistle-blowing. The issue fee is £250 and the hearing fee is £950.

There is a complicated system in multiple cases depending on the number of claimants and fees for reviews of default judgments, applications to dismiss after settlements, judicial mediation, counterclaims in breach of contract cases and for reviews. The appeal fee in the EAT is £400 and the hearing fee in the EAT, if an appeal is accepted, is £1200.

If the claimant is ‘successful’, the ET will have discretion to order the respondent to repay the fee to the claimant. The details of how this will operate will have to await the publication of the new Employment Tribunal Rules following the recent review by the former President of the EAT, Lord Justice Underhill. The Government’s response to his review has been awaited for some time.

We know from a previous stakeholder letter that it will not be possible to pay fees at the local ET like you currently can in the County Court, and that fee collection is to be centralised with an online payment facility, but there are no current details of these. What happens if it is the last day for lodging a claim and the computer system crashes, or an electronic payment is rejected? The Q&A document accompanying this stakeholder letter says there will be no extensions of the current time limits because paying a fee should ‘not cause the parties to fail to meet existing time-limits’.

If a claimant cannot afford the fee, it is intended that the existing but highly criticised Civil Courts Fee Remission system will apply.

This provides for no fee to be paid (‘a remission’) if the claimant is in receipt of a listed income-related benefit, or has gross income of no more than £13,000 if single or £18,000 for a couple. There can also be full or partial remission based on disposable income computed on the legal aid means criteria: below £50 a month confers a complete exemption, then every extra £10 of income makes the claimant liable for a fee of £5. This means claimants who think they qualify for a remission will have to send adequate evidence of receipt of benefit or income along with their application to the ET (ET1 Form).  We do not yet know what will be required, and how it will work with online applications. Currently you can apply for a retrospective remission after you have paid a fee.

If you are bringing a claim with the assistance of legal expense insurance, it is not clear whether the insurance will cover the fee. Most trade unions are going to cover the fee, which is a good reason to be a union member, but will express the fee to be a loan repayable when the application for a remission or the claim is successful. This means that fees will now become a factor in negotiations and could well lead to more hearings. If a claimant has paid £1200 they may well want their day in tribunal. They are also less likely to be tolerant of the current practice in many tribunals of listing more cases for hearing than can be heard on a particular day, so if cases do not settle the hearing has to be adjourned.

The remissions system is due to be replaced by a new system. Ostensibly this is to deal with the introduction of Universal Credit in October, but the ulterior motive appears to be to cut the number of people who qualify for a remission.

The Government has just closed a consultation in respect of a new system and, if the consultation paper (Fee Remission for the Courts and Tribunals-CP15/2013) is to be believed, a response can be expected in the summer. This means that we may have to get used to a new system within a few months of the introduction of fees in ETs. You may think it ludicrous that the Government is introducing tribunal fees in July and may then change the system in the Autumn… but I couldn’t possibly comment.

The consultation paper proposes amending the system as follows:

  • Reducing the number of benefits, receipt of which will be accepted as proof  of entitlement to a remission
  • Introducing a disposable capital test to eligibility
  • Introducing a single tapered income assessment
  • Reducing the period to apply for a retrospective fee remission from 6 months to 2 months.

I recently co-chaired – with Michael Reed, Director of the Free Representation Unit – the Employment Lawyers Association sub-committee that responded to the consultation. Our response records the concerns of employment lawyers who act for both claimants and respondents. As such, the response had to be apolitical and balanced. Even so, we all had substantial concerns with the proposals.

Our first concern was that the Government only set aside 4 weeks for responses to what was a complex paper with substantial implications for access to justice and fairness. This meant that we limited our response to commenting on the implications of the proposals to the ET system, even though the proposals cover the civil courts as well.

The proposed disposable capital test set different and lower limits to that in the means assessment of legal aid. We thought that the Government had underestimated the practical difficulties in gathering evidence of disposable household income within the time limit of 3 months for most ET claims. This would be at a time when income and capital may be changing drastically if someone had been dismissed. Claimants with little more than £3,000 could be asked to use one third of their capital to pay fees. My own views are that the sums involved and the test of what is disposable capital are totally disproportionate, unfair and a severe limit on access to justice.

We feared a lot of satellite litigation over time limits if claims for remission were not processed in a timely fashion. My own view is that as the system is new, depends on government IT systems, has not been piloted and is being introduced with obscene haste. There will be a lot of problems of good claims being rejected and appeals to the EAT to remedy the injustice.

We thought it was wrong to reduce the time limit for making a retrospective remission to 2 months from 6 months. This could penalise claimants with proper claims for a remission. My own view is that this is a cynical attempt to prevent claimants with proper claims for remissions qualifying. We have seen no draft information advising members of the public about the changes, but I anticipate the right to make a retrospective remission will be well hidden in any leaflet or online.

We considered that the proposals would have adverse equality impacts, especially for older workers and this could lead to legal challenges. Older workers are more likely to have savings for retirement, which could count as disposable capital and so not qualify for a remission. My view is that, unless the definition of disposable capital excludes savings for retirement (whether in a pension or otherwise), the proposal could result in legal challenges under the Equality Act on the basis that it is indirect age discrimination.

As we move closer to the 29th July, I will report on any further developments.


Current Controversies, Employment, Marcus Weatherby, Paul Statham,
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