15 May 2013

Employment Tribunal Fees: Spend Money to Claim Money

Employment Tribunal Fees: Spend Money to Claim Money

After much consultation, rumour and conjecture, the divisive issue of employment tribunal ("ET") fees has been finalised.

Claims made to the ET will be split into levels one and two respectively, with different fees being applicable at each level depending on the type of claim submitted by the Claimant.

 Level 1

These claims will comprise the more straightforward and lower value claims, generally for cash sums due on termination of employment which are less costly for the ET to administer. Examples of such claims would be unpaid wages, statutory redundancy payments and payment in lieu of notice. The actual cost of bringing a level one claim, not including union or legal costs (which an individual will still have to meet personally) will be £160 for issuing and then a further £230 for the hearing.

This has been attacked by advocates of employee rights and access to justice as extremely prohibitive for the average worker. An example of why this may be a valid point is that some unpaid wage claims are relatively low, maybe only a few hundred pounds. Previously it was free to attempt recovery of these wages from delinquent employers, though now it is thought that the fee will put many off and provide protection for employers that fail to pay wages.

Level 2

This comprises all other claims including unfair dismissal, discrimination, equal pay and whistle blowing claims. For these claims the applicable fees will be £250 on issuing a claim and £950 for the hearing. This is the most welcome change for employers, who previously would have to fork out thousands of pounds to defend a baseless claim of discrimination or unfair dismissal, where it had cost the aggrieved employee potentially nothing to bring the claim.

Remissions

There will however be exemption from fees for those on low incomes and benefits, in line with the current system in the County Courts. The income threshold to obtain remission for these fees are currently set at £13,000 gross income for a single person and £18,000 for a couple.

Conclusion

So while the reforms sought for the above fees will see some obvious savings for the taxpayer overall through discouraging spurious claims, a relatively low paid employee that believes they have been dismissed unfairly for example will still be able to lodge their claim with the fees being waived by the ET.

A precise date has not been given yet, though the 'end of July' has been cited as the likely implementation date.