How will SMEs be affected by the Government’s plans to reintroduce tribunal fees for employment disputes?

The Government recently announced plans to reintroduce tribunal fees for employment disputes. But it’s unlikely the scheme will deliver on its promises of reducing taxpayer costs and the backlog in the courts

to reintroduce tribunal fees for employment disputes

The proposed fees are significantly lower than the 2013 regime, which were later overturned and ruled to be unlawful, so may be seen as more “affordable” to claimants. The government has stated that there will be a help with fees remission scheme available, to assist those who are unable to afford this fee. 

It won’t help taxpayers: the government have stated that the direct running cost of the ET and EAT was around £80 million in 2022/23; the fees “could” start to generate £1.3m- £1.7m a year from 2025/ 2026 following a proposed implementation from November 2024.  Any revenue will be swallowed by increased admin costs. The scheme is a drop in the ocean of what it takes to run the ET and EAT, and is too minor to have any significance and seems to be attempt to be seen to be doing something. The government have also suggested monies would be reinvested into ACAS- which is irrational: there isn’t enough of it that will be generated!  The fee generation is totally minor and barely scrapes the surface of the cost to fund either the ET, EAT or ACAS. 

It won’t help employees: from a cost and time perspective, it is not going to generate enough resources to clear the existing backlog or to increase efficiency in the Tribunal, and although a comparatively low fee to the 2013 level, may still serve as an additional barrier for genuine claimants, particularly given by the nature of tribunals, they will have a precarious employment situation. 

There’s a suggestion that this might prevent spurious, unmeritorious or vexatious claims, which may benefit SMEs. However, the proposal will apparently not change the existing approach to costs in the Tribunal. The modest fee proposed is not minor enough to represent a significant deterrent to determined litigants, regardless of their claims being weak or even sometimes vexatious. There are already provisions in place that can be used to prevent weak or vexatious claims, they are just not frequently used by the Tribunal: it is rare for the Tribunal to strike out a claim of its own initiative, for example, and costs awards are not common. Making both of these commonplace and genuine possibilities for vexatious claims and unreasonable conduct is likely to be of more benefit to organisations in reducing such claims, than introducing a £55 fee. 

It seems setting a £55 fee does not really help anyone: business, tax payers, claimants, the Tribunal.  

Jessica Bass
Jessica Bass

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