Earlier this year, as part of its Employment Law Review, the Government conducted a public consultation on its proposal to introduce fees in the Employment Tribunals. The Ministry of Justice has now published the results of that consultation, and has indicated an intention to introduce fees in the summer of 2013.

This is a significant development in the life of Employment Tribunals, further watering down the original principle that the Tribunals would be an informal and accessible forum for resolving industrial disputes.

What will the fees be and who will have to pay them?

There will be 2 levels of claims – known as “Level 1” and “Level 2”, and different fees will apply to each of the levels:

• Level 1 claims will be claims for sums due on termination, such as unpaid wages, payment in lieu of notice and redundancy payments. The fee for issuing a Level 1 claim will be £160, and the fee for a hearing of a Level 1 claim will be £230.
• Level 2 claims will include everything else, including unfair dismissal, discrimination, equal pay claims and claims arising from the Public Information Disclosure Act. The fee for issuing a Level 2 claim will be £250, and the fee for a hearing of a Level 2 claim will be £950.

The fees above will be payable by the claimant, but the Tribunal will have the power to make an order requiring the unsuccessful party to reimburse the successful party.

In addition, the Government proposes to introduce a “remissions policy”, to be made available to claimants who cannot afford to pay the fees. To be eligible, the individual will need to provide proof that he/she is in receipt of certain state benefits, or that his/her household income is below a certain threshold. However, because of the concerns raised by respondents to the consultation, the Government will undertake a review of remissions in the latter part of 2012.

Other fees will be payable in particular circumstances, most notably in connection with an application to dismiss proceedings following the withdrawal or settlement of a claim, where a fee of £60 will be payable by the respondent (regardless of whether it relates to a Level 1 or Level 2 claim).

When will fees be introduced?

The document setting out the Government’s response to consultation suggests that fees will be introduced in the summer of 2013.

What are the implications for employers?

The Government has always said that its fees proposals were designed to encourage businesses and workers to mediate and settle disputes before they get to a full hearing. Whilst the response document and press release are more open about the fact that a key objective is, in fact, to reduce the cost burden on the taxpayer, we think there may well be a reduction in the total number of claims submitted as a result of the introduction of fees.

However, a less welcome implication for employers is the potential impact on the number of claims that are withdrawn before a full hearing. It isn’t uncommon for individuals to submit a claim to the Tribunal with no real intention of seeing it through (as they currently have nothing to lose), in the hope that the employer will pay some “compensation” to get rid of it. In those cases, through adopting the right tactics, it is sometimes possible to persuade the claimant to withdraw their claim without any payment being made.

However, in circumstances where the claimant is out of pocket, having had to pay a fee of up to £250 to submit their claim, they may be far less willing to withdraw their claim without receiving a reimbursement in respect of the fee. This is likely to create real difficulties for some employers (perhaps particularly where claims of discrimination are involved), who may see reimbursing the fee as an acknowledgement of liability.