The Ministry of Justice has published the results of its consultation on the introduction of fees in employment tribunals.

To date claimants in the employment tribunal have not had to pay anything for issuing a claim (or for having it heard) but with effect from summer 2013 it is intended that this will change. The intention is that the introduction of fees will lower the cost of the employment tribunal system to the taxpayer.

The key points are as follows:-
• level 1 claims (very straightforward ones such as unlawful deductions and claims for payment in lieu of notice and redundancy pay) – will attract a £160 issue fee and £230 hearing fee;
• level 2 claims (most other claims including unfair dismissal and discrimination complaints) – will attract a £250 issue fee and £950 hearing fee; and
• at the Employment Appeal Tribunal a £400 fee for lodging the appeal will apply, in addition to a £1200 hearing fee.

Several other fees are proposed, for example £60 for an application to dismiss following settlement and £600 for judicial mediation.

People on low incomes may not be required to pay the full fees – apparently the same remission system which already exists for court users who pay fees to use the civil courts’ services will be utilised. Following this extension of the exemption system, the Government will review its use across both courts and tribunals and publish a consultation later this year.

Fees to use the employment tribunal will be payable in advance, and most types of fee will only apply to the person bringing the claim. However the tribunal will have the power to order the unsuccessful party to reimburse the fee to the successful party. In practice, cases are often settled rather than there being a clear ‘winner’ or ‘loser’ and the issue of reimbursement would form part of the settlement terms agreed between the parties.

A fundamental review of employment tribunal rules and procedures has been carried out by Mr Justice Underhill and we have just learned some of the detail of his recommendations.

Here are a few of the key points:-

• cases are to go through an initial paper sift, to consider directions and consider strike-out of aspects lacking a reasonable prospect of success
• Case Management Discussions (CMDs) and Pre-Hearing Reviews (PHRs) are to be combined and relabelled ‘Preliminary Hearings’
• an express power is to be given to judges to limit oral evidence and submissions, and impose a guillotine if directions are breached
• rules on default judgments are to be simplified and provisions for restricted reporting and anonymity orders expanded
• the £20,000 cap on the tribunal’s ability to assess costs is to be removed, avoiding the need to refer to the County Court for assessment.

Some of these sound innovative and new but aren’t.

The initial paper sift process is already followed as a matter of practice. At best, its explicit inclusion in the Rules may encourage its effective use.

Judges can already limit oral evidence and so prevent disproportionately lengthy questioning and submissions but rarely do so in practice; again the introduction of an express rule can therefore serve only as encouragement in the use of these powers.

Combining PHRs and CMDs is a cosmetic change really; their effective use is really dependent on improved training for Employment Judges.

The other main proposals won’t affect the majority of claims; restricted reporting and anonymity orders are not relevant to most standard employment claims. Employment Judges are in our experience slow to award costs (an issue that is unfortunately left untouched by the proposals) so whilst removing the £20,000 cap makes sense, it will not affect most cases.

In summary we’d see the proposals as rather disappointing and not far-reaching enough.

The Ministry of Justice has published the annual tribunal statistics (including employment tribunals and the Employment Appeals Tribunal) for the period 1 April 2011 to 31 March 2012.

These figures show that during this period:

There were 186,300 claims received by the employment tribunals, representing a 15% decrease on the previous year. Falls were seen in both single and multiple claims of 2% and 19% respectively.

The number of claims disposed of reached 110,800, representing a 10% decrease on the previous year.

Interestingly, of the claims disposed of by the employment tribunals, only 12% were successful; 27% were withdrawn.