The UK Government has announced that the new fee regime that will apply to the Employment Tribunal system will come into effect on Monday 29 July 2013.

The Introduction of Tribunal Fees

From 29 July 2013, claimants wishing to bring a claim in the Employment Tribunal will have to pay an “issue” fee when they file their claim form, and a “hearing” fee before the hearing is due to commence.

The level of fee will vary depending on whether the claimant is bringing a “Type A” claim or a “Type B” claim.  Broadly, Type A claims are those considered to be the more straightforward types of complaint, such as unlawful deductions from wages or a complaint that an employer has failed to permit time off for dependents.  Type B claims are those that are typically more complicated, such as unfair dismissal and discrimination claims.

There is no fee to be paid to defend a claim but there will be fees for certain types of applications made in the course of proceedings.  For example, an application to dismiss a claim following its withdrawal by a claimant will now entail a fee of £60. It will also now cost employers £600 to use the Tribunals’ judicial mediation service. In addition, an issue fee of £400 and a hearing fee of £1,200 will now apply in relation to any appeals made to the Employment Appeal Tribunal. 

Importantly, the Employment Tribunal will have the power to order an unsuccessful party to reimburse the successful party for any Tribunal fees incurred.

What Does This Mean for Employers?

In theory, the introduction of the fee regime should deter employees who are “trying it on” to see if their employer will pay them some money to settle. Claimants with low or negligible incomes will, however, be exempt from paying the new fees. Given that most claims will be brought by employees who have been dismissed and are therefore without an income, it may well be that the majority of claimants are able to claim an exemption, which will render the new system toothless.

Nevertheless, there could be merit in employers timing any upcoming dismissals to take effect after 29 July 2013 so unhappy employees will have to bring any claims under the new fee regime. This may make certain employees less likely to claim.

Finally, employers should note that there is a plan to introduce an amended Form ET3, on which an employer must provide any response to a Tribunal claim. The new form has not yet been published and so has not yet come into effect. Employers should therefore continue to use the current Form ET3 for the time being. We will of course notify you when this changes.