Settling disputes is in everyone’s interest!

Monday 29 July 2013 saw the implementation of the latest wave of the Government’s employment law changes. In summary they are:

  • The introduction of fees in the employment tribunal and employment appeal tribunal
  • Pre-termination settlement negotiations no longer admissible
  • Compromise agreements to be renamed ‘settlement agreement’
  • New cap on unfair dismissal compensatory award
  • New tribunal rules
  • In this month’s E-news we set out a Q&A guide on the new Employment Tribunal fee regime, and a summary of the other changes.

Q&A: Employment Tribunal fees

Q1. How much will an employee have to pay to bring a claim?

A1: The level of fee depends on the nature of the claim. There are two types of claim; Single Claimant claims and Multi-Claimant claims. Claims are separated into two Types and include the following:

Type A Type B
Statutory redundancy payment Unfair dismissal
Equal pay Discrimination
Unlawful deduction from wages Whistleblowing
Breach of contract
  • The Issue fee payable by a Single Claimant will be £160 for a Type A claim and £250 for a Type B claim
  • The Hearing fee payable by a Single Claimant will be £230 for a Type A claim and £950 for a Type B claim.

The issue fee and the hearing fee payable by a group bringing multiple claims will depend on the number of Claimants:

Type A – Issue fee Type B – Issue fee Type A – Hearing fee Type B – Hearing fee
2–10 Claimants £320 £500 £460 £1,900
11-200 Claimants £640 £1,000 £920 £3,800
200 + Claimants £960 £1,500 £1,380 £5,700

There are also specific application fees:

  • Reconsideration or a default judgment (Type A claim: £100, Type B claim: £100);
  • Dismissal following withdrawal (Type A claim: £60, Type B claim: £60);
  • Judicial Mediation payable by the Respondent only (Type B claim: £600);
  • Employer’s counter claim in response to an employee’s contract claim (Type A claim: £160); and
  • Reconsideration of a Judgment following a final Hearing (Type A claim: £100, Type B claim: £350).

Q2. How are the fees paid?

A2: Fees will be payable through HM Courts & Tribunal Service (HMCTS) online or collected through a centralised processing centre (there will be one in England and Wales and one in Scotland). In general, Tribunal offices will not have the facility to take fees in any form.

Q3. What will happen if the fee is not paid?

A3: A claim will be rejected if it is not accompanied by the appropriate fee or a remission application.

Q4: How much will it cost to appeal a decision of the Employment Tribunal?

A4: After 29 July 2013, fees will be payable for any appeal to the Employment Appeal Tribunal (EAT). Fees will be paid online or by cheque to the central processing centre.

The fee regime in the EAT will be simpler than that in the Tribunal. Fees are payable by an Appellant.

  • The Appellant must pay the £400 “issue fee” by a date specified in a notice which will be issued by the EAT after it has received the Notice of Appeal.
  • The Appellant must pay a £1,200 “hearing fee” by a date specified in the notice which will be issued by the EAT after it has directed that the appeal should proceed to an oral hearing at which the appeal will be disposed of.

Q5: What will happen if the employee cannot afford to pay the fee?

A5: The employee will need to apply for a fee remission or part remission. There are three routes to full or part remission:

  • Qualifying benefits: if the individual is in receipt of a qualifying benefit, for example, Income Support or Job Seekers Allowance.
  • Gross annual income: if the individual’s gross annual income (combined with their partner if a couple) is less than the applicable threshold.
  • Disposable monthly income: if the individual does not qualify for full remission by the above two routes, they may be entitled to part remission of the fee depending on their disposable net monthly income.

Q6: Will the individual have the fee reimbursed if they are successful in their claim?

A6: Possibly. The Employment Tribunal may order the unsuccessful party to reimburse the fees paid by the successful party.

Changes to Compromise Agreements

From 29 July 2013, statutory compromise agreements are to be renamed ‘settlement agreements’. This is little more than a name change for all future agreements.

Pre-termination negotiations

Most offers now made or discussions held with a view to terminating an employee’s contract on agreed terms will be inadmissible in any subsequent unfair dismissal proceedings. In effect, the existing “without prejudice” regime will be extended in relation to unfair dismissal claims only to include situations where no dispute has arisen at the time of the settlement discussions. This means a settlement proposal could be made at any stage of an employment relationship. A word of caution, there are exceptions. For example the new rule will not cover:

  • Claims alleging breach of the Equalities Act (in other words, discrimination claims); claims alleging breach of contract including wrongful dismissal; claims alleging automatic unfair dismissal, such as whistle blowing or asserting a statutory right.
  • Where there has been improper behaviour by the employer

The employer can also reserve the right to refer to the settlement offer; for example to seek to claim costs.
To help employers, ACAS have produced a new Code. In addition, statutory guidance has been produced.

New Cap on unfair dismissal compensatory award

Dismissals that take effect on or after 29 July 2013 will now be subject to a new cap, which will be the lower of the statutory cap (which is currently £74,200) or one year’s pay. This together with the recent increase in the qualifying period to bring a claim for unfair dismissal to 2 years is likely to to result in a rise in allegations of discrimination or whistle blowing, as these will still offer uncapped compensation.

New Employment Tribunal Rules

Many employers will breathe a sigh of relief to hear that the new ‘robust’ rules are now in place to manage all current cases (generally speaking, irrespective of when they were started). The key points to note are:

  • Power to manage cases more robustly: For example, the introduction of a ‘sift’ stage, strike out powers and issuing timetables for the running of hearings including how long each party has to give evidence and cross examine.
  • Preliminary hearings to be combined with Case Management Discussions (this has been introduced to save time and expense)
  • Power now to award up to £20,000 costs rather than having the costs determined by a court.

The overall desire of the new rules is to reduce the cost of the employment tribunal system for the taxpayer. It is anticipated that the introduction of the new rules will ‘weed’ out weaker cases and impose a greater control of the case once proceedings are commenced.

We would be delighted to provide an update of these changes to your organisation. If you would like to discuss this further then please do not hesitate to contact us.


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.

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