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an introduction to Employment Tribunal fees

15 January 2014

Fees were introduced in the Employment Tribunal for the first time on 29 July 2013. From this date a fee is payable when: a claim is submitted, a claim is listed for hearing, certain types of application are made, and the parties agree to judicial mediation.

The claimant must include the correct fee or remission application (see below) when submitting a claim; otherwise the claim will be rejected. There are two levels of fee depending on the type of claim being brought:

  • Level 1 (e.g. redundancy, unlawful deduction from wages, refusal to allow time off for dependants) – £160 issue fee + £230 hearing fee
  • Level 2 (e.g. unfair dismissal, discrimination, whistleblowing) – £250 issue fee + £950 hearing fee.

If the claimant is one of a set of claimants bringing a group claim, different fees apply depending on the number of claimants in the group.

If the case settles there is no refund of the fee. This will likely mean that settlements are increased to factor in the costs of fees or result in parties trying to settle before fees incurred.

Fee remission

Following consultation, the Government decided to proceed with a single fee remission system in all courts and Tribunals (including the Employment Tribunal) and the UK Supreme Court, and it is hoped such system will be “fairer, more transparent and easier for all users”. The proposals, which took effect on 7 October 2013, introduce two new tests for assessing whether an applicant is entitled to a fee remission:

  • a disposable capital test; and
  • a gross monthly income test.

An applicant will have to satisfy both tests to be eligible for fee remission. Qualification for fee remission under the disposable capital test depends on the amount of savings et cetera that the applicant (and their partner) has. If they have less than £3,000 in savings they will qualify for full remission, for those with savings between £3,000 to £8,000 they are required to pay more than one third of their savings on a fee, and for those with savings over £8,000 they are not required to pay more than half their savings on a fee.

If an applicant has passed the disposable capital test and has a gross monthly income below the threshold set out in the table below, they will qualify for full remission.

Gross monthly income with: Single Couple
No children £1,085 £1,245
1 child £1,330 £1,490
2 children £1,575 £1,735
Add £245 for each additional child

If an applicant has over the gross monthly income threshold they will be required to make a contribution towards their fee of £5 per every £10 above the threshold, up to the value of the fee.

The applicant will not be entitled to a fee remission if they have a gross monthly income over the threshold set out in the table below.

Gross monthly income with: Single Couple
No children £5,085 £5,245
1 child £5,330 £5,490
2 children £5,575 £5,735
Add £245 for each additional child
Can an applicant get their fees back?

Under the new Employment Tribunal Rules (which also came into force on 29 July 2013), the Tribunal has the power to make an order that the respondent reimburse the fees paid by the claimant if they are successful in bringing the claim, and vice versa the respondent can seek a costs order if they are successful. Whether or not to make an order is at the Tribunal’s discretion, it is not contingent on the Tribunal finding there has been vexatious behaviour or that the claim had no reasonable prospect of success.

Are fees a deterrent?

Initial fees are low and claimant will have some time to acquire the money needed to pay the fees once the notice of final hearing is issued. It is however estimated that employers will save between £2-£10m per annum in not responding to claims.

Further changes forthcoming?

Unison and Fox & Partners have both applied for a judicial review of the introduction of Employment Tribunal fees; UNISON on the basis that the fees disproportionately affect women, and Fox & Partners on the basis that the fees are unfair and disproportionate financial burdens on employees. The Unison decision is expected before Christmas.

These changes to fees are likely to result in a reduction in the costs incurred by insurers in defending employment cases, in line with the expected reduction in the number of claims made.

If you have any queries, please contact us.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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