At the end of January 2024, the UK Government set out a surprise proposal to introduce a £55 fee for individuals to bring proceedings in the Employment Tribunals (ET) and Employment Appeal Tribunal (EAT). This would be a significant change to the current claims process, which has been free of charge since 2017.

Take me back to 2013

Some of us who have been practising employment law for a "few years" will remember when ET and EAT fees were first introduced in 2013; the fee regime included an issue fee and a hearing fee, which varied between the simple "Type A" claims and the more complex "Type B" claims. Total fees for a Type A claim came to £390 whilst total fees for a Type B claim amounted to over £1,000.

In 2017, the Supreme Court found that these fees were unlawful. The court held that, amongst other findings, the fees were indirectly discriminatory and effectively prevented access to justice. As you might expect, the number of ET cases dropped during the years that the fees were in place, and had steadily increased since their abolition to the extent that ETs have been struggling with a widely reported backlog for many years.

What’s different this time?

The government is now consulting on introducing a "modest" £55 issue fee for all claims, regardless of complexity, in both the ET and the EAT. Under the proposal, there will be no hearing fee, so £55 will be the total cost to bring a claim.

Unlike the 2013 fee regime, the government considers its current proposal to be "proportionate and affordable." Additionally, the "Help with Fees" remission scheme will support those who can’t afford the fee, helping to alleviate any hurdle posed by the £55 fee. Furthermore, by suggesting the same fee regardless of the complexity of the claim, the government will hope to avoid suggestions that the fee is indirectly discriminatory like the previous fee regime.

The current consultation does not propose any changes to the ET costs regime, which provides that generally each party pays for their own legal costs irrespective of the outcome of the case.

What would this mean to employers?

If passed, it is possible that employers would see a significant reduction in the number of claims. The introduction of fees in 2013 served as a barrier to bringing proceedings, and claims dropped significantly as a result. ET claims more than halved in the 12 months following the 2013 fee introduction. Perhaps unsurprisingly, the Trade Union Congress has stated its opposition to the proposal to reintroduce fees, calling this "another example of ministers taking the side of bad bosses."

It is unlikely that the recent smaller fee proposal will have the same impact, but it is possible that claims will still fall. £55 represents a substantial sum to those on lower incomes and it may well put off some would-be claimants, especially those considering bringing low value, low merits, or vexatious claims. Nevertheless, the remission scheme should help to lessen any potential preventative effect of the fee.

Nothing has been decided yet and the consultation closes on March 25, 2024 after a relatively short eight-week consultation period. Even if the ET and EAT fee was introduced, it remains uncertain whether a Labour government (should Labour win the next election) would reverse the change. General consensus is that a Labour government would prioritise other changes to employment law already set out by the party, but only time will tell.

Watch this space!