Details of planned tribunal fees revealed

The government has opened a consultation on the fees to be charged for entering a tribunal claim, with details revealed of two alternative charging structures.

Option one in the consultation, released by the Ministry of Justice, would see claimants pay an initial fee of between £150 and £250, followed by a fee of £250 and £1250 if the case proceeds to a hearing. There would be no limit on potential compensation under this structure.

Option two would see an alternative model under which claimants would pay a one-off fee at the outset, but would be able to choose between paying a smaller fee – between £200 and £600 – and having their potential compensation capped at £30,000, or paying a higher fee of £1750 and being free to seek higher compensation.

Tribunals will have the discretion to order an employer that loses a tribunal case to reimburse the fee paid by a successful claimant.

The government has already settled on the policy of charging for tribunals as part of its efforts to reduce red tape for business, but the result of the consultation, which runs until March 6th, will affect the timetable for implementation. If the first option is adopted it will be introduced in 2013, but the second option requires primary legislation and would not be able to be introduced until 2014.

“Employment tribunals and the employment appeals tribunals are in need of reform,” Justice Minister Jonathan Djanogly writes in the foreword to the consultation. “Bringing a claim or appeal to these tribunals is currently free for users, with the full £84 million annual cost of running the tribunals being met by taxpayers, despite the fact that most of them will never use the service.

“It is of course vitally important that employees have meaningful access to justice. But employers complain that, at its worst, the operation of the current system can be a one way bet against them, with parties inadequately incentivised to think through whether a formal claim really needs to be lodged, or whether it could be settled in other ways such as conciliation, mediation or informal discussions.”

The CBI welcomed the consultation. “Charging a fee to bring a tribunal case is a good way of weeding out more of the weak and vexatious claims, which are costing the taxpayer many millions of pounds a year,” said policy director Katya Hall. “Asking a higher fee for the bigger claims will also help to keep expectations realistic.

“It’s right that the tribunal system is given more time to deal with legitimate cases, which really deserve attention. Introducing fees shouldn’t be a barrier to justice, because the government is waiving fees for those who cannot afford to pay.”

Tim Thomas, head of employment policy at manufacturers’ organisation the EEF, also welcomed the fee proposals but expressed concern at the amounts losing employers may end up paying. “We are concerned that giving tribunals discretion to order the employer to reimburse successful claimants could leave employers with a triple hit of the award, a fine and reimbursing the upfront fee. The government must ensure that tribunals can only use these powers where there is genuine evidence of bad practice by the employer".

Source: People Management