Tribunal fees and employment law changes come into effect

A new set of employment regulations came into effect on 29 July.

The most controversial, the introduction of fees for bringing claims to employment tribunals, went ahead as planned despite opposition from union leaders.

The changes mean that employees wishing to bring a claim to a tribunal now have to pay fees on a sliding scale depending on the nature of the claim and the number of claimants.

Level 1 claims include breach of contract, equal pay, holiday pay, redundancy issues and wages.

Level 2 claims include unfair dismissal, detriment and discrimination.

For a Level 1 claim, the employee will have to pay an Issue Fee of £160 to begin the claim and then a further £230 if the case proceeds to a tribunal hearing.

Level 2 claims will require an Issue Fee of £250 and a Hearing Fee of £950.

Fees for groups of claimants will vary depending on how many people are involved. For example, if there are between 2 and 10 claimants, the Issue Fee will be £500 followed by a Hearing Fee of £1,900. Cases involving more than 200 people will involve an Issue Fee of £1,500 and a Hearing Fee of £5,700.

Unison has campaigned against the changes and has been granted permission to apply for a judicial review of the lawfulness of the scheme. This is due to be heard in October. However, the High Court rejected the union’s application for an injunction to delay the introduction of fees until its application for review had been heard.

Further changes that came into effect on 29 July include a cap on unfair dismissal compensation of one year’s gross pay or £74,200, whichever is the lower.

The new regulations also mean that “settlement agreements” replace “compromise agreements”. The new agreements will still be legally binding. In essence, they allow an employee to waive certain rights such as taking a claim to a tribunal in return for terms set out in the agreement.

The new settlement agreements allow for pre-termination negotiations to take place “without prejudice” even if there is no existing dispute at the time. This is in contrast to the previous system whereby there had to be an existing dispute for the “without prejudice” protection to take effect.

The purpose of the change is to make it easier for settlements relating to termination of employment to be reached without either side fearing their words may be used against them if the matter goes to a court or tribunal hearing.

Employers should still take great care, however, as the protection only extends to ordinary unfair dismissal claims. It doesn’t cover dismissals that are automatically unfair, or relate to matters such as discrimination or breach of contract. The protection may also be removed if anything is said or done in pre-termination negotiations which a tribunal later considers to be improper.

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