What do employment tribunal changes mean for employers?

Significant changes have been brought into force this week in relation to employment tribunal claims. Victoria Mitchell of Farleys explains.

From Monday, it became necessary for an employee who wants to bring a claim against their employer in the employment tribunal to pay fees.

There will now be two fees payable by an employee who wants to bring a claim, an issue fee payable when lodging the claim and a hearing fee payable on a date specified by the employment tribunal when the case is listed for hearing.

  • For most claims, such as unfair dismissal and unlawful discrimination, the issue fee will be £250. The hearing fee will be £950.
  • For smaller claims such as a redundancy payment, breach of contract or unlawful deductions from wages, the issue fee will be £160 and the hearing fee will be £230.
For employees on lower incomes or benefits there will be a system by which it will be possible for these fees to be funded. Each case must be assessed on an individual basis before an application for fee remission can be made.

These changes are some of the most significant in employment law for some time and will likely effect the number of claims being brought before the employment tribunal. Failure to submit the fee or an application for a fee remission will prevent a claim being accepted. This combined with the three month time limit is likely to weed out a number of potential claims.

This is not all good news for employers. Where claims are decided in the employee’s favour, the employer is likely to be ordered to pay the claimant the fees they had previously paid to the tribunal. In addition, there will of course be circumstances in which employers themselves will need to pay fees to the employment tribunal.

Employers will have to pay fees in the following circumstances:-
  • When making a breach of contract claim against an employee (£160)
  • When seeking a reconsideration of a judgement (£100 or £350)
  • When applying for judicial mediation (£600)
  • When applying for a case to be dismissed upon withdrawal (£60)
  • When appealing to the Employment Appeal Tribunal (£400 appeal fee and £1,200 hearing fee)
Failure to pay the hearing fee will result in the tribunal specifying a date when the fee has to be paid or the case will be struck out. A claimant can apply for a case which has been struck out on this basis to be reinstated.

In addition, where an employer would have previously known within the three month’s following an employee’s exit from the business whether or not a claim would be brought against them; there may now be a delay in this period of notification, especially if a claimant has made an application for fee remission.

Where the time limit for an employee to lodge a claim has not changed, the process of applying for, and being granted, funding is likely to result in additional administrative work, meaning it could be some weeks after the normal three month period until an employer is made aware of a claim being brought against them. In these times of change to the employment tribunal system, it is more important than ever to seek specialist advice in relation to either lodging or defending an employment claim.