Added Tribunals (Employment Tribunals and Employment Appeal Tribunal) Order 2013 — Motion to Approve

Part of the debate – in the House of Lords at 7:35 pm on 8 July 2013.

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Photo of Lord McNally Lord McNally Deputy Leader of the House of Lords, The Minister of State, Ministry of Justice, Liberal Democrat Leader in the House of Lords 7:35, 8 July 2013

My Lords, I shall also speak to the draft Employment Tribunals and Employment Appeal Tribunal Fees Order 2013. The purpose of these orders is to make provision for fees to be paid by those who present claims or make appeals to employment tribunals and the Employment Appeal Tribunal. They also make provision for fees to be remitted or waived in full or in part if the person cannot afford to pay using the existing civil courts remission scheme.

Bringing a claim or an appeal to employment tribunals and the Employment Appeal Tribunal is currently free of charge. In 2012-13, the cost of running the employment tribunals system was £74.4 million. That cost was entirely met by the taxpayer. While the Government are committed to providing a fair system for those who need an independent tribunal to settle an employment dispute, we also believe that it is perfectly reasonable that those using the tribunals should contribute to their cost, where they can afford to do so. It is important that noble Lords understand that introducing fees into these tribunals is not an attempt to deter individuals from bringing claims—vexatious or otherwise—and given the mitigations in place we do not believe the provisions of this order will do so.

Employment tribunals were originally intended as the option of last resort in disputes when all other resolution services had failed. Over time that status has eroded and claims are now often launched prematurely, without exploring alternative options for resolving disputes. The introduction of fees can support a necessary change in the mindset of users and help to reset the system by encouraging individuals to stop and think about whether a dispute can be settled without recourse to a tribunal, and whether it is really necessary to submit a claim. Complementing that aim, mandatory early conciliation will be introduced in 2014, meaning parties will not be able to bring a claim to the tribunal without first having sought a conciliated resolution via ACAS.

The Government are also implementing a brand new simplified set of rules and regulations governing procedure in employment tribunals. The simplified rules attempt to roll back and reset unnecessary complexity in tribunal rules, creating increased clarity and understanding for the lay person. This ought to reduce claimants’ reliance on legal representation and help return employment tribunals to the role envisaged when they were first set up.

Responsibility for the wider employment law, including the rules, lies with the Department for Business, Innovation and Skills. Should issues arise in this debate that are beyond my remit I will ask my colleague, my noble friend Lord Younger, to respond in writing should it be necessary. I am confident that noble Lords will see that these proposals are not an attack on employment rights or on people with low incomes. They simply reset the system that this Government inherited and reduce the taxpayer subsidy of employment tribunals by transferring some of the cost to those who use the service, while protecting access to justice for all. Assuming parliamentary approval, the instrument is due to come into force on the day after it is signed and made. We are confident that, subject to that approval, fees will come into effect on 29 July this year.

I turn now to the provisions of each order. Parliament has already made provision for fees to be charged in tribunals under Section 42 of the Tribunals, Courts and Enforcement Act 2007. The added tribunals order provides for employment tribunals and the Employment Appeal Tribunal to fall within the provisions of Section 42 as added tribunals allowing the Lord Chancellor to prescribe fees by order for anything dealt with by them.

The fee structure provided in the fees order reflects the decisions made and announced after the Government’s consultation paper, Charging Fees in Employment Tribunals and the Employment Appeal Tribunal. We considered the views expressed by those who responded to the consultation, and settled on a final structure taking proper and full account of those views.

Part 2 of the order provides for claimants to pay an “issue fee” covering a contribution to the pre-hearing costs, and then a “hearing fee”, payable 3 or 4 weeks before a hearing, should that stage in proceedings be reached. It also outlines a number of application fees, payable by the party making the application, and a fee for judicial mediation, payable by the respondent.

Sections 5 to 10 provide the fees payable. Two levels of the issue and hearing fees are proposed, and are defined in the order as type A and B claims. Claims are allocated to type A or B depending on the nature of the complaints described in the claim form. Type A claims are those which are simpler for the tribunal to deal with and so cost less for a claimant to bring—namely, £160 at issue and £230 before the hearing. Type B claims are more complicated, requiring more tribunal time and resources to determine. Therefore they attract higher fees of £250 at issue and £950 at hearing. Where there is a mixture of type A and B claims within the same claim form, the higher fee will be paid.

Sometimes in the employment tribunal two or more claimants present their claims on the same form. The order defines this as a fee group, and the number of people in the fee group also affects the fee due to be paid. There are three bands of fees, increasing on a sliding scale depending on the number of individuals named within a form. If claimants present their claims in this way, the fee payable per person will usually be much lower—and will never exceed—the amount that they would have paid if they had sent their claim separately.

In certain circumstances, Article 12 provides a safeguard ensuring that no one in a fee group will have their claim struck out because of the failure of others in their group to arrange a group payment if they themselves are willing to pay the single fee.

Part 3 of the order provides for fees in the Employment Appeal Tribunal. A flat fee regardless of claim or appeal type will be required on instituting an appeal. A further flat fee will be required ahead of the full hearing of the appeal. Part 4 of the fees order provides for transitional arrangements and remissions. Fees will be charged from the date of the order, so that those who have commenced their claims or lodged their appeals before this date will not pay any fees. Schedule 3 of the fees order makes provision for a range of remissions or fee waivers based on the existing HMCTS civil courts scheme. This scheme will ensure that access to justice is protected by reducing or remitting fees for individuals who provide evidence of being in receipt of particular qualifying benefits, or that their income is below certain thresholds.

The Government are fully committed to ensuring that tribunals remain accessible and continue to provide an effective service which is responsive to users. This measure provides for the users of the Employment Appeal Tribunal to make a contribution towards the provision of that service and to better balance the cost of providing access to justice between the user and the taxpayer without restricting that access.

I therefore commend the orders to the House and hope that noble Lords agree that the measures which I have proposed today should proceed.