Government watchdog slam Tribunal fees as too high

The committee which examines the expenditure, administration and policy of the Ministry of Justice, assessed the impact of a range of changes to the regime of fees and charges which apply to the courts and tribunal system.

The coalition government introduced fees for the first time for employment tribunals in July 2013 as part of its policy to reduce the costs of Her Majesty’s Court and Tribunal Services (HMTCS). Other government objectives were to encourage parties to find alternative ways to resolve disputes, and to dis-incentivise weak and vexatious claims.

However since the introduction of fees, as set out below,  the number of Employment Tribunal cases has dropped considerably by just under 70% to 4,500  per quarter  in October 2014 to June 2015. Trade union statistics show a reduction in unfair dismissal claims by 72%, sex discrimination claims by 68% and unauthorised deductions from wages claims by 56%.

The committee heard evidence that far from encouraging early resolution, the fees were having the opposite effect because there was no incentive for an employer to settle in cases where the claimant might have difficulty in raising the fee. The Council of Employment Judges told the committee that prior to the introduction of fees money claims were often brought by low paid workers in sectors such as care, security, hospitality and cleaning. Since fees were introduced, such cases are rare.

The report summarised by stating that whilst a contribution by users to the costs of operating courts and tribunals was not objectionable in principle, the level of fees should be substantially reduced, and that fee remission thresholds should be increased to help address the constraints on access to justice.  The committee recommended further consideration should be given to women alleging maternity or pregnancy discrimination in light of evidence that pregnancy discrimination was widespread in the public and private sector, but very few women took action. Leading charity Maternity Action recorded a 40% drop in claims for pregnancy related detriment or dismissal, as women preferred using their money and savings to buy furniture, clothes bedding and toys for their babies.

Different rates of fees are payable in the Employment Tribunal according to the two categories of claims being pursued, Type A and Type B. The more complex claims, for example unfair dismissal, whistle blowing and discrimination claims, fall into Type B. The issue fee is required at the outset of a claim, whilst the hearing fee is generally payable about a month in advance of the full merits hearing.

Type of fee                             Type A                        Type B

Issue Fee                                £160                            £250

Hearing Fee                           £390                            £950

Total fees                               £390                            £1,200

An individual is entitled to full remission if he/she (or partner) has less than £3,000 in a disposal capital, e.g. savings, and does not have a gross monthly income of more than £1,085 (single) or £1,245 (as a couple). An individual receiving some means tested benefits will also be entitled to assistance with fees.

The average salary in the UK is £26,500 although it is significantly higher in London. The median Employment Tribunal awards in 2014-2015 relating to the following claims were: unfair dismissal - £6,955, sex discrimination -£13,500, race discrimination - £8,025 and disability discrimination - £1,1080. The Employment Tribunal has the power to order an employer to reimburse a successful claimant in relation to court fees.