Will 2024 See the Reintroduction of Fees in the UK Employment Tribunals?

It has been just over a decade since Employment Tribunal (ET) fees were first introduced in July 2013 by the?Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013?(SI 2013/1893). Under the order, claimants had to pay varying fee levels to issue their claims and have them heard in the ET.

The Fees Regime 2013

The level of the 2013 fee regime categorised ET claims into Type A or Type B claims with different fees payable for each type. Type A claims (which covered simple disputes such as unpaid holiday pay) attracted an issue fee of ￡160 and a hearing fee of ￡230 and Type B claims (which covered more complex disputes such as discrimination) attracted an issue fee of ￡250 and a hearing fee of ￡950. The Employment Appeal Tribunal (EAT) attracted a ￡400 issue fee and a ￡1,200 hearing fee.

The Tribunal Fees Order coincided with a decline in cases being presented to the ET and was subsequently quashed by the Supreme Court on 26 July 2017 in the case of R (on the application of Unison) v Lord Chancellor UKSC 51 for being an “unlawful interference with the common law right of access to justice.”?

On 29 January 2024, the UK government announced the launch of an eight-week consultation period regarding the proposal to reintroduce “modest fees” in the ET. In the announcement, it was made clear that the Ministry of Justice had “carefully considered” the ruling of the Supreme Court in the Unison decision and recognised that the level of fees introduced in 2013 “did not strike the right balance between meeting the policy objective for claimants to meet some of the costs of the ET and EAT and protecting access to justice” and their approach to setting the proposed fees in 2024 would be based on three key principles of affordability, proportionality and simplicity.

Modest Fees

The proposed modest fee is a ￡55 issue fee which will be payable by the claimant on bringing a claim to the ET. The fee of ￡55 would remain even where a claim is brought by multiple claimants and, unlike the Tribunal Fee Order of 2013, the government is “not proposing to charge a hearing fee, the ￡55 issue fee will cover the entire journey of a claim in an ET”.

The same ￡55 issue fee would also be payable to lodge an appeal in the EAT, with a ￡55 issue fee payable per judgment, decision, direction or order of an ET being appealed.?

If a claimant cannot afford to pay the proposed fees, there will be a help-with-fees scheme which, provided the claimant meets the eligibility criteria, will entitle them to a partial or full fee remission. There would further be an exemption of any fee payable for individuals who have to bring proceedings before an ET to establish their right to a payment from the National Insurance Fund.

Purpose of Proposal

The reintroduction of fees in the ET and the EAT would be consistent with the approach to charging fees in other courts and tribunals.

The government has advised in its consultation paper that at present, in the absence of any fees payable in the ET or EAT, all costs of administering the tribunal services incurred by HMCTS are entirely borne by the taxpayer, as are all costs of the early conciliation service provided by the Advisory, Conciliation and Arbitration Service (ACAS).

In 2022/2023, the direct costs of running the ET and EAT were set out as around ￡80 million. Given these costs, one of the purposes of the proposal to reintroduce issue fees in the ET and EAT “is intended to relieve some of the cost to the general taxpayer by requiring tribunal users to pay for the tribunal system, where they can afford to do so.”

The government also hopes the proposed fees may “incentivise parties to settle their disputes early through ACAS without the need for claims to be brought to an ET” and alleviate some of the pressures the ET are currently facing. Whilst the government has acknowledged the pressures on the ET, the consultation is limited to the level and structure of the proposed issue fees.

Implementation of Fees

In making the announcement on 29 January 2024, the government stressed its consideration of the 2017 Unison judgement and the need for a simple, affordable fee. It should be noted that the proposed fee of ￡55 is considerably less than the ￡390 fees payable in 2013 for a Type A simple claim.

With tribunals being underfunded and with the government estimating ￡600,000 to ￡700,000 in expected fees for the first five months after implementation and then ￡1.3 million to ￡1.7 million yearly afterwards, we could see the reintroduction of fees in the ET and EAT as early as November 2024.

The consultation closes on 25 March 2024.

We will keep you updated as to any developments in this consultation.