Employment tribunal fee remission scheme to be expanded following government review

However, the growth has mostly been driven by the introduction of mandatory conciliation through Acas, with more people taking advantage of the free scheme than were using the previous voluntary scheme and the employment tribunals combined, according to the long-awaited report.

In particular, the government said that it was concerned that the fall in claims brought to the employment tribunal had been "significantly greater than was estimated when fees were introduced". As a result, it intends to extend the scope of the 'help with fees' scheme available to tribunal users on lower incomes, and will immediately exempt from fees certain claims against insolvent employers.

Justice minister Sir Oliver Heald said that it was "right that those who can afford to should contribute to the cost of employment tribunals".

"Under our reforms, record numbers are bringing forward disputes in tribunals or through the Acas consolation service," he said.

"Costs should not prevent anyone bringing claims, so we are extending our 'help with fees' scheme and will introduce a green paper on further legal support measures. The Prison and Courts Bill will also bring more people online, making it even simpler and easier to access justice," he said.

Fees from users now contribute between £8.5 million and £9m to the running costs of the employment tribunals each year, "in line with what we expected", according to the government's report.

Employment tribunal fees were introduced on 29 July 2013, partly to transfer some of the costs of operating the tribunals from the taxpayer to those that use the service. Parties now have to pay an upfront fee to raise a claim, followed by a further 'hearing fee' once the case is referred to a tribunal.

Claims are subdivided into the administratively simply 'Type A' claims, with fees of £160 and £230 respectively; and 'Type B' unfair dismissal or discrimination claims, with fees of £250 and £950. Flat fees apply to employment appeal tribunal (EAT) cases. A remission system operates to exempt people on low incomes from having to pay the full fees, while the introduction of the new rules also coincided with the new requirement for free, mandatory conciliation via the government-backed Acas service before a case can proceed to tribunal.

More than 92,000 new employment disputes were registered with Acas last year, the highest number since fees were introduced, according to the government's report. Around half of those cases were resolved through conciliation, without the need to go to the tribunal.

The government recorded a drop of around 70% in both multiple and single cases brought to the tribunal in the first year after fees were introduced. Between 3,000 and 8,000 people who were unable to resolve their disputes through conciliation did not then go on to bring tribunal proceedings because they said they could not afford to pay, although the government said that there was "no conclusive evidence" that they had been prevented, rather than discouraged, from doing so.

It has proposed to raise the income threshold for full fee remission from £1,085 to £1,250 for a single person, or approximately the gross monthly income of a single person over the age of 25 working full–time for the National Living Wage (NLW). Additional allowances would remain in place for people "living as couples" and those with children. The 'disposable capital' test, which disqualifies anyone with disposable capital of £3,000 or more from the remission scheme, would not change.

Although the consultation, which closes on 14 March, makes reference to the NLW as part of the new threshold, the government does not intend to increase it annually in line with increases to the NLW. Instead, the government intends to "keep the level of fees and remissions ... under regular review". The changes would also apply to proceedings in the civil and family courts, and to most other tribunals.

An exemption from tribunal fees for "a small number of proceedings related to payments made from the National Insurance Fund" has been introduced immediately, as in most of these cases "the applicant is unable to conciliate or recover fees". The exemption applies to claims for unpaid wages or redundancy pay from an employer which has since gone bankrupt.