Government sets out its proposals for employment tribunal fees

A consultation (84-page / 400KB PDF) published by Justice Minister Jonathan Djangoly sets out two possibilities: an initial fee to begin a claim followed by an additional fee if the claim goes to hearing, or the payment of a single fee and limiting the maximum award to £30,000.

The Government said its proposals would reduce the cost of the tribunal service to the taxpayer, as well as encouraging parties to consider whether they could resolve their case outside the tribunal.

It is currently free to take a claim to an employment tribunal or appeal to the Employment Appeal Tribunal. During financial year 2010/11, 218,000 claims and 2,048 appeals were made at a total cost to the taxpayer of £84.2 million, according to Government figures.

Under the Tribunals Courts and Enforcement Act the Lord Chancellor has the power to introduce fees in certain tribunals, including employment tribunals and the Employment Appeal Tribunal. The Government announced its intention to introduce tribunal fees earlier this year as part of its wider reforms to encourage the early resolution of workplace disputes.

The consultation puts forward two options for consideration, based on the maximum award being sought. The first option, which would not limit the maximum award, proposes charging parties an initial fee of between £150-250 to begin a claim with an additional fee of between £250-1,250 if the claim goes to a hearing. Alternatively, a single fee of between £200-600 could be charged, however this would limit the maximum award to £30,000. An additional fee of £1,750 is proposed for those who seek awards above this amount.

In both options, the tribunal would be given the power to order the unsuccessful party to reimburse the successful party's fees. The consultation also proposes a fee remission system, similar to that already in place in civil courts in England and Wales, where the party raising the claim is in receipt of a listed benefit or otherwise cannot afford to pay.

Employers have complained that the current system significantly disadvantages businesses as there are few incentives for aggrieved employees to choose mediation or conciliation through services such as ACAS if they have a dispute, the Government said. It said that around 80% of applications made to the tribunal service do not result in a full hearing or are settled out of court.

The Government said that it would continue to fund the cost of ACAS, which helps people in employment disputes reach agreement without the need for legal proceedings. The services ACAS offers are free to users.

Justice Minister Jonathan Djangoly said that forcing taxpayers to bear the full cost of "resolving other people's employment disputes" was unsustainable.

"We believe that people should pay a fair amount towards the cost of their case. Fee waivers will be available for people on low incomes to protect access to justice," he said.

"Our proposed fees will encourage businesses and workers to settle problems earlier, through non-tribunal routes like conciliation or mediation and we want to give businesses – particularly small businesses – the confidence to create new jobs without fear of being dragged into unnecessary actions."

The consultation will close in March 2012. Fees would be introduced from 2013 if the Government chose to implement the first option. However, as further legislation would be needed before the maximum award granted by a tribunal could be limited the second option would not be able to go ahead until 2014.

The Government announced a "radical" review of employment law last month, including the potential reduction of the 90-day minimum consultation period for collective redundancies and increasing the length of service an employee needs before being eligible to bring an unfair dismissal claim.