Employment tribunal fees set to encourage mediation and arbitration

From Summer 2013, employment tribunal fees are being introduced to encourage businesses and workers to mediate or settle a dispute rather than go to a full hearing.

Following a consultation with businesses and the public by the Ministry of Justice, it has been decided that some of the fees will be slightly lower than initially proposed in order to strike a fair balance between the needs of business and users of the tribunal system.

Fee Introduction

It is currently free of charge to bring a claim or an appeal to employment tribunals with the full cost being met by the taxpayer. But, with the introduction of a fee, it is expected that people using employment tribunals will contribute a significant amount to the annual £84m cost of running the system.

It is hoped that the introduction of the tribunal fees will promote early resolution of disputes and the intention is to encourage people to look for alternatives – such as mediation – so that tribunals remain a last resort for the most complex cases.

From summer 2013, mediation by a judge will cost £600 rather than the £750 proposed in the 2011 consultation. This offers a considerable saving on the £1,200 it would cost to take a ‘level 2’ claim all the way to full hearing. The lower fee to take the administratively simpler ‘level 1’ claims to a full hearing will be £390 – which drops to just £160 if settled before the hearing fee is payable.

Exceptions

Many people on low incomes may not be required to pay the full fees – under the same remission system which already exists for court users who pay fees to use the civil courts’ services. Following this extension of this exemption system, the Government will review its use across both courts and tribunals and publish a consultation later this year as part of a wider review required by the introduction of Universal Credit in late 2013.

Fee Payments

Fees to use the employment tribunal will be payable in advance with most types of fee only applying to the person bringing the claim. However the tribunal will have the power to order the unsuccessful party to reimburse the fee to the successful party.

In practice, cases are often settled rather than there being a clear ‘winner’ or ‘loser’ and the issue of reimbursement would form part of the settlement.

Increased Flexibility

The introduction of fees is part of the Government’s Employment Law Review which aims to maximise flexibility for both employers and employees while protecting fairness and providing a competitive business environment. The Review includes a package of reforms to streamline and modernise the employment tribunals system, including routing all claims to ACAS to offer early conciliation before going to a tribunal, and encouraging more use of mediation through a best practice project in the retail sector and also regional mediation pilots currently being developed in Manchester and Cambridge.

For more information, see the Ministry Of Justice website.