Government sets employment tribunal fees for employees

Employees will soon have to pay £1,200 to bring an unfair dismissal claim to an employment tribunal.

The new fee arrangement will be introduced next summer and follows widespread consultation with business leaders and trade unions.

Currently, employees don’t need to pay to make a claim. This has led to complaints from some businesses that it is too easy for disgruntled staff to waste time with frivolous claims.

Starting next summer, employees will need to pay a fee upfront to raise a claim and then another when the case is referred to a tribunal.

The measure is designed to reduce the cost that the tribunal system places on the taxpayer. During the financial year 2010-11, there were 218,000 claims and 2,048 appeals at employment tribunals. This cost the taxpayer £84.2m.

It’s hoped the new fee system will encourage employers and claimants to mediate or settle a claim through negotiation without having to proceed to a full hearing.

Justice Minister Jonathan Djangoly said: “It’s not fair on the taxpayer to foot the entire £84 million bill for people to escalate workplace disputes to a tribunal.

“We want people, where they can, to pay a fair contribution for the system they are using, which will encourage them to look for alternatives. It is in everyone’s interest to avoid drawn-out disputes which emotionally damage workers and financially damage businesses.”

The Government has made the fees slightly lower than they had originally planned in order to “strike a fair balance” between people with genuine claims and employers defending themselves against frivolous claims.

Claims will be divided into two categories and will be charged accordingly. A ‘level 1’ claim includes matters such as holiday pay and redundancy. A ‘level 2’ claim covers issues such as discrimination and unfair dismissal.

A level 1 claim will cost an issue fee of £160. If the case is taken to a full hearing a further £230 will be payable making a total cost of £390.

Level 2 claims will cost an initial £250 plus a hearing fee of £950 making a total of £1,200. The fee for mediation by a judge will be £600. People on low incomes can apply for exemption from the fees.

If the claimant wins his case it is expected that he would receive the fee back as part of the settlement.

Please contact Robert Bedford if you would like more information about the issues raised in this article or any aspect of employment law.