Employment Law has been brought sharply into focus in recent months due to the, now resolved, constructive dismissal case brought against Lord Sugar by Stella English. Lord Sugar countered this by claiming that Stella English had resigned.
As we now know Lord Sugar was the victor, with the tribunal saying: “There was no dismissal of the claimant - the claimant resigned.”
The implications of who pays for what in cases like this need to be fully understood before bringing such action, especially as significant changes to the tribunal process are imminent.
Currently the Employment Tribunal system is free of charge. But fees are being introduced in July 2013 in order to encourage the parties to try to settle their dispute without the need for litigation and to reduce the £84m per annum cost to the taxpayer of running the Tribunal system.
A 2-stage fee is being introduced with the first part payable when the claim is lodged and the 2nd part payable for the final hearing.
Level 1 claims, eg unpaid wages, will incur a fee of £160 to lodge the claim and £230 for the hearing. Level 2 claims, such as unfair dismissal will incur a fee of £250 to lodge the claim and £950 for the hearing.
Fees will also be payable for various applications.
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.
Currently, each side pays its own legal fees. Under the new system, Tribunal judges will have the power to order an unsuccessful party to reimburse the successful party’s legal fees. Therefore, if an employer loses a Tribunal claim they may be ordered to pay not only compensation to the employee but also to repay the fees the employee has incurred in bringing the claim.
The introduction of Tribunal fees may reduce the number of claims going through the Tribunal system, to the benefit of employers. Certainly, it may deter those employees with weaker claims from pursuing them.
However, the impact may not be so widely felt in relation to unfair dismissal claims where employees are out of work and in receipt of benefits, as this may mean they fall within the remission scheme and will not be required to pay the relevant fees.