New Employment Tribunal Rules and Procedures

The Government has announced its intention to bring new tribunal rules into force. Initially these were due in April 2013 but Summer 2013 is now looking more likely with the final rules expected to be published in May.  The responses to the consultation which has taken place, indicates the Government is looking to introduce a range of provisions which will impact legal practitioners more than HR professionals.

Of more interest to employers are the following proposed changes to tribunal practice:

Tribunal fee structures

From Summer 2013 a claimant will now be required to pay a fee at the issue of their claim.  If the claim will proceed to a full tribunal hearing, the claimant will be required to pay a subsequent fee which will be referred to as the “hearing fee”.  Provisionally this will be payable around four to six weeks before the hearing date (this timing will be kept under review, in light of concerns expressed regarding exchanging witness statements).  Tribunal judges will have a power to order the unsuccessful party to reimburse the fees paid by the successful party, although this will be at the judge’s discretion rather than an automatic order.

The level of the fee will depend on the type of claim.  There are two types of claim:

•  Level 1 claims comprise more straightforward and lower value claims, generally for sums due on termination of employment (such as unpaid wages, redundancy payments and payments in lieu of notice), which are less costly to administer and adjudicate; and
• Level 2 claims comprise all other claims, including unfair dismissal, discrimination, equal pay and whistle blowing claims.

The fees are as follows:

Application-specific fees

The Government will implement fees for specific separate applications to the tribunal.  The five types of discrete application which will now attract a separate fee are:

• An application to set aside a default judgment.  This will attract a fee of £100;
• An application to dismiss a claim following the claim’s settlement or withdrawal.  This will cost £60 and would be payable by the employer;
• An application for judicial mediation.  This will cost £600 and will be payable by the employer;
• A breach of contract counter-claim.  This will cost £160, payable by the employer; and
• An application for a review of a tribunal’s decision or judgment.  This will cost £100 for Level 1 claims and £350 for Level 2 claims.  The fee will be payable by the party making the application.

Employment Appeal Tribunal fees

Fees in the EAT will mirror the two-stage structure to be implemented in the employment tribunals.  There will be a fee of £400 to issue an appeal and a further fee of £1,200 to proceed to a full hearing.

Practical implications

Opinions are divided as to whether or not the introduction of tribunal fees is sensible and just. It is also uncertain whether or not it will have any impact on the volume and nature of claims.  The Government says the fee structure has been put in place to encourage settlement.  We anticipate that a few frivolous claims may drop away without getting to the tribunal but equally we also anticipate claimants who have paid fees to become more entrenched in their position. We also expect a new service to be provided by some insurers, solicitors and employee groups of offering to pay for fees if claims are believed to be strong.

The Government is currently grappling with the issue of “remission of fees” (i.e. waiving all or part of the new fees) for claimants who may be otherwise unable to bring any claims.  This may potentially delay the Summer 2013 introduction timetable as we have seen very little of this at the time of writing.

Ultimately, we will still see a range of claims but the issue of fees will create a new tactical angle for parties to consider, especially in light of the early conciliation provisions (which initially were due to also come in at the same time – but have now been delayed to Spring 2014).  For example, the issue of who will pay fees in a settlement will be an additional area for negotiation.

For further information, help or advice please contact our Employment Team on 0191 211 7777 or email [email protected].