January 31, 2013

Employment Tribunal System Reforms

The government has implemented an Employment Tribunal fee system which will commence this summer 2013.

The payment of fees for lodging a tribunal claim is part of its wider reforms in supporting and encouraging early resolution of work place disputes in order to transfer some of the cost burden from the tax payer to users of the Employment Tribunal system.

Although it is hoped the parties will enter a period of mediation via acas before proceeding to tribunal which will be known as “early conciliation”, this may not be introduced until April 2014.

Although bringing a claim to tribunal and the Employment Appeal Tribunal is currently free with the tax payer meeting the costs of running the tribunals, as from Summer 2013 there will be two separate fee charging schemes.

The First Option

This involves the nature of the employment law claim and the stage it has reached in proceedings determining the level of fees charged.

The number of people involved in multiple claims will also determine the value of the fees. There will now be two fees payable at the tribunal, the first being at the time the claim is lodged called the “issue fee” and the second fee will be paid before the hearing takes place named the “hearing fee”.

For single claims the issue fee to submit the forms will be charged at between £250 and £1,250 both being payable by the claimant, with a further six fees being chargeable for specific applications once a claim has been accepted, which will include requests for written reasons and counter claims.

Straightforward claims for unpaid monies such as unpaid wages , holiday pay and redundancy pay will attract an issue fee of £160 and a hearing fee of £230. With more complex claims such as unfair dismissal, equal pay, and discrimination issues attracting an issue fee of £250 and a hearing fee of £950.

The Second Option

This consists of one main fee paid by the claimant at the issue stage amounting to between £200 and £1,750 for a single claim. This is regardless of whether or not the claim progresses to a hearing. Similar to option one, this will also attract six further fees for different applications made after the claim has been accepted.

The level of fees here would depend on the value and nature of the claim and the number of people involved. The claimant’s fee would be higher if they were claiming over £30,000 compared to claims under this threshold.

Alternatively, claimants could request a mediation session with a Judge presiding instead of lodging a full tribunal claim, but the mediation will attract a fee of £600.

For the Employment Appeal Tribunal only one fee is proposed which will be an issue fee of £400 and a hearing fee of £1,200.

However, for people who cannot afford the above fees, the HM Courts and Tribunals service remission system will be available. Further, the tribunals will have the power to order the unsuccessful party to reimburse the successful party their fee in order for the cost to be borne by the party who caused the employment tribunal system to be used, with the further possibility of employers who lose an unfair dismissal claim being ordered to pay a penalty to the Treasury.

It is hoped that straightforward claims such as holiday pay may be resolved easily and may not need oral hearings or the involvement of a Judge. However, all claims may still prove costly if the case settles before reaching the hearing, as no hearing fees will be refunded and must be paid in advance, approximately four weeks before a hearing and the fee will only apply to the person bringing the claim.

These changes show a move to a more formalised approach to litigation usually associated with Civil courts. Some may say these changes are an attempt to save money, but also for the tribunal system to be updated and not be seen as an informal forum which people do not take seriously.

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