Most claimants to be exempt from new tribunal fees

Most claimants to be exempt from new tribunal fees

Business leaders have raised fresh fears that the new tribunal fee system, designed to discourage spurious claims, will be "undermined" by the majority of people being exempt from the new rules, under plans outlined on Friday.  By Telegraph Jobs editor, Louisa Peacock

The Ministry of Justice (MoJ) has announced that claimants will have to pay up to £1,200 to lodge a tribunal claim and see their case go to hearing from 2013, under plans designed to make people think twice about suing their past or present employers.

The total fee is £550 lower than originally suggested in last year's consultation and applies to "complex" claims including unfair dismissal, sex discrimination and equal pay.

The bulk of the £1,200 fee – some £950 – will be paid by the individual if the case reaches a hearing, but claimants could settle or withdraw before this stage.

Claims which are "simpler" and potentially pay out less in compensation, such as for redundancy payments or unpaid wages after termination of employment, will require a smaller total fee of £390, which includes an initial fee to lodge the case and the hearing fee, the MoJ said.

However, the Institute of Directors (IoD) said that the majority of claimants will be exempt from the new rules, meaning the threat of having to pay potentially large sums to take a case to hearing would have little impact.

The changes are unlikely to discourage many vexatious claims; cases where disgruntled workers chance their luck and put a claim in when it has little chance of success, the employers' group said.

Alexander Ehmann, head of regulatory policy at the IoD, said: "The IoD is concerned that under current proposals many unemployed claimants will have their fees waived despite having the means to pay. Even the Government accepts this could mean that the majority of claimants are exempt from their new rules – a result that would undermine the entire purpose."

He added, however, that businesses backed the decision to introduce fees to weed out vexatious or weak claims. "Businesses are too often forced to defend themselves against claims which have no merit, incurring heavy costs in the process," he said.

Tim Thomas, head of employment policy at EEF, the manufacturers’ organisation, said: "The current remission system will result in most claimants paying little or nothing, and whilst we welcome the Government’s intention to consult [further] on changes in the Autumn, unless most claimants have to pay at least some fee, today’s announcement will have little impact.”

The reforms are intended to reduce the number of tribunal cases in the system – which in the last year reached 186,300. This was a 15pc fall year-on-year but is still 23pc higher than since 2008-9.

The consultation had proposed two options for tribunal fees. The first was paying an initial fee followed by a hearing fee. The second was to pay a set fee of up to £600, rising to £1,750 if the compensation award sought was more than £30,000.

The Government has rejected option two after most businesses disliked the idea overall, though many were in favour or the threshold proposed.

Unions were against the plans to introduce fees.

TUC general secretary Brendan Barber said: “It is vital that working people have fair access to justice, but introducing fees for tribunals will deter many – particularly those on low wages – from taking valid claims to court. Many of the UK’s most vulnerable workers will simply be priced out of justice."

The MoJ's official response to its consultaion, published on Friday, said individuals may not have to pay any fees if they would have difficulty paying and meet certain criteria. The tribunal fees system would mimic the "remission" system used in the civil and family courts, the department said.

The MoJ added the employment tribunal system cost the taxpayer £84m a year. A statement said: "The aim of these proposals is to reduce the taxpayer subsidy of these tribunals by transferring some of the cost to those who use the service, while protecting access to justice for the most vulnerable."

This article was originally featured on

Monday, 16 July 2012

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