The Ministry of Justice issued a consultation document on 14 December 2011 setting out proposals to charge fees for employment tribunals and the Employment Appeal Tribunal.
The proposals were issued on the same day that the latest unemployment figures were released, showing that a new high of 2.64m people are unemployed, and that unemployment in Scotland had risen by 25,000 over the three months to October 2011.
The proposals come shortly before the implementation of a doubling to two years the qualifying length of employment that claimants must have in order to make a complaint to a tribunal of “ordinary” unfair dismissal.
The consultation paper sets out two separate options for employment tribunal fees.
Option one includes a fee payable by the claimant to lodge a tribunal application, and a second fee if the case goes to a full tribunal hearing. Three different levels of fee are proposed depending on the type of claim.
Level one would cover claims for unpaid wages and redundancy payments, level two would cover unfair dismissal claims, and level three would apply to HR and whistle blowing claims.
The proposals for the actual fees payable for each of the three levels range between £150 and £250 to make a tribunal claim, and between £250 and £1,250 for a tribunal hearing.
The second option would work differently, with only one fee payable, covering submitting the claim and going to a tribunal hearing. Four levels of fees are proposed, with the fourth level applying to claims with a value of more than £30,000. Claims with a value of less than £30,000 would be aligned with the three fee levels set out in option one. The one-off fees payable would range from £200 to £1,750.
The consultation paper goes into fine detail about how the options would work, and includes proposals to charge fees for requesting written reasons for a tribunal decision, and seeking a review of a judgment, among others. It also proposes to waive or reduce fees payable by claimants who are either unemployed or in low paid jobs. For some purposes it would take an entire family’s income into account when deciding whether the claimant would be entitled to a reduced fee.
There is also a proposal to "fine" employers who lose cases at tribunal, in addition to being ordered to compensate the employee.
A separate proposal would see the introduction of a flat fee of £400 for lodging an appeal to the Employment Appeal Tribunal, and a further charge of £1,200 for an EAT hearing. Since employees and employers lodge appeals, this would impact on business as well as individuals.
In his introduction to the paper Jonathan Djanogly, a junior minister in the Justice Department, says that the government is trying to boost employer confidence, boost competitveness, and encourage job creation. He also questions whether the £84m annual cost of running the employment tribunals service should be met solely by taxpayers, most of whom will never use the system.
The government is clearly aiming to reduce the number of employment tribunal claims made each year. Claims have risen from 80,000 in 1998 to 218,000 in the year to March 2011. In some respects the government is picking up where the last administration left off, because one of its aims is to get disputes resolved at an earlier stage, in the workplace. The last government introduced statutory rules for employees and employers to follow before a tribunal claim would be accepted. However, those rules were quickly scrapped because they had not been thought through fully, and led to widespread confusion and dissatisfaction.
Whether this government’s attempts to reduce the number of workplace disputes ending up in the courts remains to be seen.
The full set of consultation documents can be accessed here.