Ministry of Justice proposes fees for employment tribunal claims

In 2013, the Government introduced a fees regime applicable to employment tribunal claims, whereby claimants wishing to lodge a claim and proceed to a full hearing were required to pay between £390 to £1,200. The level of fees was dependant on the type of claim being submitted and how far the case progressed. Some estimates suggested this led to the number of cases falling by some 70% over a four-year period.

In 2017, the decision to introduce fees was famously outlawed by the Supreme Court, on the basis that it “effectively prevents access to justice and is therefore unlawful”. The decision was highly critical of the introduction of fees, the concern being that those individuals who were low earners or without income due to being unfairly dismissed effectively were barred from seeking any legal remedy. Not only did the decision lead to fees being abolished but it also required the Government to refund all fees that had been paid.

In reaching its decision, the Supreme Court left the door open to a future introduction of fees by failing to say what level of fees would be acceptable (if at all). It was assumed at some point the Government would try again - and some six years later, the Ministry of Justice has now recently confirmed that it is proposing to reintroduce a fee of £55 for individuals to bring a claim in the employment tribunal, with a further £55 fee being required to appeal a decision. The fee will be applied irrespective of how many claimants there are, what the claims relate to and whether there is a hearing or not.

The decision to do so has been criticised by many, including the TUC, as well as unions such as UNISON, for placing a hurdle in the way of claimants seeking justice. Junior Justice Minister, Mike Freer, has defended the decision and described the fees as “modest”.

The rationale behind the decision is that the employment tribunal and the employment appeal tribunal should be able to recoup from those who use the system. Given the number of claims submitted in the employment tribunal, the Government is anticipating that the £55 fee will generate revenues of between £1.3 million and £1.7 million. However, this is a drop in the ocean when compared with the £80 million cost of running the employment tribunals in 2022-2023.

On the basis that the £55 fee is only likely to generate revenues of between 1.5% to 2% of running the employment tribunal service, it is difficult to justify the business case for re-introducing a fees regime. Given the time that will be required by the Government to consult on the proposals, and the time required to implement the changes it is unlikely to be introduced before the end of this Parliament. Labour has yet to formally announce its position on the introduction of fees but one would assume they will be under pressure from the unions to either dilute the proposal significantly or not take the proposal forward should they win the next election.

Given the relatively modest level of the fees one has to question the Government’s real intention in proposing to introduce them. It could be that the Government is hoping for a reduction in frivolous claims being brought so that the burden on employment tribunals is alleviated and the £80 million required to run them each year will reduce over time. It will be interesting to see how this topic progresses over the next few months, with the consultation period due to come to an end on 25 March 2024.

‍Susan and Andrew's article was published in People Management, 1 March 2024.