Employment & Pensions Blog: Ministry of Justice launches a consultation on the (re-) introduction of fees in Employment Tribunals

On 29 January 2024 the Government issued a consultation paper on the re-introduction of fees in Employment Tribunals and the Employment Appeal Tribunal, nearly 7 years after the Supreme Court quashed the charging system.

What is proposed?

The consultation proposes to introduce a requirement to pay a one-off fee of £55 to present an Employment Tribunal (ET) claim or submit an appeal to the Employment Appeal Tribunal (EAT). The fee would be paid by a “Claimant” when presenting a claim in the ET and by an “Appellant” in the EAT. Where a claim is brought by multiple Claimants, the Claimants would be treated as “one” and the fee payable would remain at £55 to be divided amongst them. It is envisaged that the same fee would be payable for all types of claims, save that no fee would be required where an individual is asserting their right to a payment from the National Insurance Fund. There would be no separate hearing fee (as was previously the case).

For EAT appeals, the £55 fee would be payable for each judgment, decision, direction, or order of an ET that is being appealed by the Appellant. There would also be no separate hearing fee.

The consultation runs for eight weeks and will end on 25 March 2024. It is currently unclear as to when any proposed changes would come into effect.

What sparked the change?

A fees regime was previously introduced in 2013. Under that regime some claims required a £160 issue fee plus a separate £230 hearing fee for Claimants. For other claims the fees were £250 and £950 respectively. That regime was quashed in 2017 by the Supreme Court in the judgment of R (Unison) v Lord Chancellor because of its disproportionate impact on access to justice. The Government recognised at the time that it did not strike the right balance between its competing policy objectives of funding the tribunal system and protecting access to justice. 

The Government has, on this occasion, announced that it carefully considered the Judgment and endeavoured to ensure that the proposed fees are proportionate and affordable creating the requisite balance. It wishes to re-introduce fees for reasons of consistency with other courts and to generate funds to aid the running of the Tribunals. The Ministry of Justice estimates that the proposed fees could generate £1.3 - £1.7 million a year and separately noted that it may encourage Claimants to seek to resolve their disputes via ACAS early conciliation prior to a fee needing to be incurred when bringing an ET claim.

Comment 

Whilst employers will see this as a steer in the right direction, it will unlikely bring a significant change to how some Claimants approach ACAS Early Conciliation. Many see this mandatory requirement to conciliate in order to bring an ET claim as a mere “tick boxing” exercise and enter into it with no real intention to conciliate or reach an early resolution. This proposed fee regime will also unlikely deter Claimants from bringing spurious claims which could have eased pressures on ETs and in turn reduced their overall running costs. We also do not consider that any challenge to the introduction of a fee regime will be successful as given its low value, it presumably addresses the disproportionality impact on access to justice argument previously raised. It must also be noted that those on a low income, with little to no savings, will also be entitled to financial support via the proposed fee remission system.

With many reporting that the general election will be towards the end of this year, there is still time for the Government to implement these proposals. Whilst they will be unpopular with Trade Unions, it remains to be seen whether a Labour Government would go as far as repealing them if they won the election.  

If you have any questions on this consultation, please get in touch with a member of our Employment Team.