Fees in employment tribunal proceedings

Posted 11/10/2012

Vince Cable’s Department for Business, Innovation and Skills is currently running a number of consultations on employment law issues. One current consultation concerns the avoidance of disputes upon terminating the employment relationship; another concerns the changes to Employment Tribunal rules proposed by Mr Justice Underhill.  

Whilst the changes that these will introduce will have a significant effect on HR practice, the change which is likely to have by far the most far-reaching consequences has already been decided on and announced. The Government has decided to introduce fees in Employment Tribunal proceedings. In all but the most straightforward of cases, in all claims concerning the troublesome areas of unfair dismissal and discrimination, the Government proposes that claimants should pay an issue fee of £250 when they file their claims at an Employment Tribunal and a further fee of £950 before the case proceeds to a hearing. The fees will be greater for multiple claims. It is proposed that fees should be introduced in the summer of 2013.

The Government denies that its intention is to deter individuals from making claims, whether vexatious or otherwise. They state that their purpose is to move the cost of the Employment Tribunal process onto the users of the system and move away from the current position where the taxpayer pays all of the costs.

Notwithstanding what the Government has asserted, there can be no question that the introduction of significant fees will have the effect of making claimants think twice before issuing claims against an employer or former employer. The following consequences may follow:Employment Tribunal practice has been plagued by “buccaneering” claims brought cynically because the claimant knows that the cost to their employer of defending the claim will be greater than the amount of a settlement. The introduction of fees may well have the effect of weeding out such opportunistic claims.However, those claimants who are determined enough to pay the fees are going to want to recover them. For the first time costs are likely to become a battleground in Employment Tribunal cases and employers are going to have to consider them as part of any settlement.There will no doubt be further consequences, both intended and unintended, which the new costs regime will bring about. It will be interesting for practitioners to review the changed landscape a year or so after these changes have been introduced.