The UK Government is exploring the possibility of reintroducing nominal fees for Employment Tribunal cases to limit taxpayer expenses and encourage early resolution of disputes.
Unveiled on January 29, 2024, the Government’s proposal suggests the reimplementation of ‘modest’ fees within the Employment Tribunal and Employment Appeal Tribunal systems. The rationale behind this move is to alleviate the burden on taxpayers by requiring tribunal users to contribute financially, provided they are capable of doing so. Additionally, it is anticipated that these nominal fees could serve as an incentive for parties to settle their disagreements at an earlier stage, potentially alleviating the current strain on the Employment Tribunal.
In the wake of a Supreme Court ruling in 2017, which deemed the fees introduced by the coalition government in July 2013 unlawful, there have been no fees associated with bringing claims to the Employment Tribunal or Employment Appeal Tribunal.
Under the newly proposed fee structure, claimants would be required to pay £55 to initiate any claim at the Employment Tribunal, with the same amount applicable for appellants in the Employment Appeal Tribunal. This marks a significant reduction compared to the previous fee system introduced in 2013, which classified claims into Type A and B, each associated with varying fees.
Type A claims, encompassing simpler disputes such as unpaid holiday pay, previously incurred an ‘issue fee’ of £160 and a ‘hearing fee’ of £230. Meanwhile, Type B claims, involving more complex issues like discrimination, attracted higher fees, including an issue fee of £250 and a hearing fee of £950. The Employment Appeal Tribunal fees were set at £400 for an issue fee and £1200 for a hearing fee. However, under the new proposal, no hearing fees would be applicable.
Certain exemptions will apply to the £55 fee, including cases where individuals are unable to afford the fees as defined by the Government. Moreover, some specific claims will be exempted, notably those against the national redundancy fund and claims related to failure in collective consultation during large-scale redundancies.
In terms of financial implications and timeline, based on the volumes observed in 2022-23, the Government projects that the proposed fees could generate annual revenue ranging between £1.3 million and £1.7 million from 2025-26 onwards. Pending a successful consultation, the Government intends to implement the fees starting November 2024. Currently, the fee structure remains unchanged, allowing claimants to lodge claims with the Employment Tribunal and appellants with the Employment Appeal Tribunal at no cost. However, the Government’s proposal, though initially reasonable, may lead to implementing nominal fees in the future.
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