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Tribunal fees and their effects

Updated: Feb 16

The introduction of a fee scheme for claimants in Employment Tribunals has proved controversial. Find out more about how the scheme works and what the costs are in our article.

Employment tribunals were set up by the Industrial Training Act 1964 and were funded by the taxpayer. However, in July 2013, the Government introduced a fee system for Employment Tribunals, based on the belief that it was proper to ask those using the system to contribute towards its running. The unions, on the other hand, argued that the introduction of fees prevented universal access to justice.

How does the fee scheme work?

The scheme has five principal features:

  • The fee to be paid will differ depending on the type of claim (A or B)

  • To lodge their claim, claimants must pay an “issue fee” and at the first hearing stage, a “hearing fee”. Those fees are also payable should the claimant appeal a tribunal judgement.

  • The fee also varies depending on whether the claim is a single or multiple one and can vary depending on the number of claimants.

  • If the claimant is successful in their case, the employment tribunal may make an order to the employer to reimburse the fees.

  • A remission scheme has been established so that those who can prove they are on limited means will be exempted from paying the fees.

Issue and hearing fees

A Type B claim is “any claim other than one listed in Table 2 in Schedule 2”. Type B claims generally raise more complex issues or require the evidence to go into greater detail about the case. Two such types are unfair dismissal and discrimination claims.

Article 4(1) of the Fees Order requires that fees must be paid by a single claimant or a fee group:

(a) when a claim form is presented to an employment tribunal (“the issue fee”); and (b) on a date specified in a notice accompanying the notification of the listing of a final hearing of the claim (“the hearing fee”).

The claim form must include either the issue fee or a remission claim application. If it does not, then the claim will be rejected.

If the fee amount is incorrect or the remission application is rejected, the claimant will receive a notice specifying a date for payment. The outstanding amount must be paid by that date or the claim will be rejected.

When the claimant is notified of the final hearing, they need to pay the hearing fee. Article 2 of the Fees Order defines the final hearing as “the first hearing at which an employment tribunal will determine liability, remedy or costs”.

If the claimant wants to take the tribunal’s judgement to the Employment Appeal Tribunal, they will need to pay further fees unless remission is granted. Regardless of the type of claim, the EAT issue fee (£400) and hearing fee (£1,200) are the same.

Where a claim is brought jointly by a group of claimants, different fees are payable:

Part A – Type A Claim

The Unison challenge to the fee system

As mentioned above, the unions had argued that the introduction of fees would prevent universal access to justice and in November 2013, Unison challenged the decision in the High Court.

Unison said that the fees scheme was unlawful because it infringed the EU legal principle of effectiveness – that the requirements for domestic legal actions must not make it ‘virtually impossible’ or ‘excessively difficult’ for people to exercise the rights they enjoy by virtue of being EU citizens.

The High Court accepted that the union had a good case to make about the likely effect of the fees, but it said that fees were not inherently unlawful; however, they could be if evidence proved them to be discriminatory or showed that they made it excessively difficult to enforce EU law-derived rights.

Because of the time at which the case was heard, there was not sufficient evidence to prove Unison’s assertion and therefore the arguments were based on predictions by the rival parties. The Court ruled that more time was needed to fully assess the effect of the fees scheme.

By October 2014, Unison believed that it had new statistics that would enable it to prove its case (see above). It made a second application for judicial review. It used the new figures on the decline in employment tribunal claims to try and prove that the Fees Order infringed the principle of effectiveness.

It also argued that the fees regime was discriminatory because particular claims which were more likely to be brought by women were in the second claim band, Type B.

Countering this claim, the Government said that Unison’s claims were too generalised to be useful; there were no concrete examples of specific individuals allegedly denied access to the tribunals.

The judge agreed with the government, saying that the Court needed to see examples of actual cases so that the infringement of the principle of effectiveness could be assessed.

It accepted that the statistics showed how the introduction of fees had affected the willingness of employees to bring claims. However, being unwilling did not necessarily mean that they were unable to do so, and this was the real question at hand. The judge said:

“It is not enough that the fees place a burden on those with limited means. The question is not whether it is difficult for someone to be able to pay – there must be many claimants in that position – it is whether it is virtually impossible or excessively difficult for them to do so.”

It is conceivable that at some point in the future, one or more individuals falling into the category of those who found it virtually impossible or excessively difficult to bring a claim to tribunal could bring judicial review claims of their own, perhaps with the assistance of a trade union).  However, the High Court indicated in its decision that such an individual would need to have applied to the Lord Chancellor, through Her Majesty’s Courts and Tribunals Service (HMCTS) for fee remission due to exceptional circumstances, prior to starting their claim.

Regarding Unison’s claim of indirect discrimination, the Court said that the union had not supplied sufficiently clear evidence of discrimination. Even if there was indirect discrimination, it was likely that that it was justified in achieving a legitimate objective. The judge explained:

“… the onus is on the claimant to show that there has been discrimination, I am not satisfied that the burden has been discharged here. Even if it has, the extent of any adverse effect is very small. That is relevant to the issue of justification.”

In establishing the fee scheme, the Court held that the government was trying to achieve three specific objectives:

  • transferring a proportion of tribunal running costs to users who benefit from it and could afford it

  • improving the efficiency of the tribunal system by removing unmeritorious claims, and

  • encouraging alternative methods of dispute resolution.

The judge was sure that the objectives were legitimate and – if regard were paid to the arrangements designed to assist the poorest claimants – were justified and proportionate to any discriminatory effect.

The Court was also unpersuaded that women or any other protected group were discriminated against by the introduction of Type B fees.  It felt that to focus on a sub group of cases within Type B (such as people who brought discrimination claims) would distort the results of any analysis into indirect discrimination.

UNISON’s application was therefore dismissed but the union was granted leave to appeal to the Court of Appeal.

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