Why Have Free Employment Tribunal Claims Been Capped?

Employment Tribunal Claims

For years, an employee’s choice to bring an issue of employment law before an employment tribunal was free of charge for them, but now this has changed in favour of fixed fees.

Although there is no doubt that many of these reported cases are either fraudulent or exaggerated, the act of making such claims has not affected employees to any major degree because launching such a lawsuit has always been without financial charge. In these cases the company on the receiving end of the lawsuit would inevitably have to pay thousands of pounds in legal fees regardless of whether the tribunal rules in favour of the plaintiff or not. To avoid these charges, companies will usually pursue an out of court settlement just to escape the legal expenses and any fees the defendant plaintiff may acquire from them.

This has long been a concern in UK employment law and it was finally addressed in July 2013 when the British Government began a policy to introduce fees for employees issuing employment tribunal claims. This move is intended to deter false claims while helping reform the tribunal system so that those employees making accusations pay a fair amount for their lawsuit

The fee to issue a Type A claim is now £160 which covers claims made for redundancy payment and cases where unlawful deductions from employee wages has occurred. Type B cases which assess claims of unfair dismissal and discrimination will also be charged to the tune of £250. In addition to these fees a hearing fee also exists. This extra charge costs £230 for Type A claims and £950 for Type B.

However, in certain cases it is possible to gain an exemption (remission) from these fees. To qualify for this remission the plaintiff must have a disposable capital of more than £3,000, or £16,000 if they are over 61 years old. If a claimant’s disposable capital does not reach these figures, their gross monthly income will be considered. Other factors will be taken into consideration for the plaintiff’s claims include whether they are single, in a relationship, or have children or not.

UK Public sector union Unison has issued a challenge to the introduction of these fees, claiming the charges are unlawful on two clear grounds:

  1. They breach the EU rule of effectiveness due to making it “virtually impossible, or excessively difficult” to exercise rights conferred by EU law.
  2. The fees were indirectly discriminatory because the higher Type B fees discriminate against more vulnerable groups, such as female claimants, disabled claimants and ethnic minorities.

However, in February 2014 the High Court threw out these challenges believing that there isn’tenough evidence to overturn the introduction of such fees. The High Court stated that these concerns were being expressed too soon and that the UK legal system would better to wait and see if these concerns could bear any fruit. Unison is planning to launch an appeal through the Court of Appeal to challenge this ruling.

Evidence to support this decision comes from the fact that the number of tribunal claims being issued has actually fallen since the introduction of fees last year. Claims accepted by the courts between July-September 2013 totalled 39,514 when compared to the same period in 2012 when 47,789 claims were accepted; a drop of 17%. 

Amy Francis is a blogger who specialises in employment law tribunals. She recommends contacting Natemplaw.co.uk where all legal concerns are supported by a team of top employment law solicitors.