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Scottish Government Announces Intention to Abolish Employment Tribunal Fees

The Scottish Government has announced its intention to abolish Employment Tribunal fees (A stronger Scotland – the Government’s programme for Scotland 2015-2016). This reform would be possible under the anticipated transfer of powers in this area from Westminster to the Scottish government. If the Scotland Bill is enacted, the Scottish government has said that it will scrap tribunal fees as part of a broader programme aimed at increasing fairness at work.

How Employment Tribunal fees work

Fees to bring claims in the Employment Tribunal were introduced in July 2013. The fee for lodging a tribunal claim is either £160 or £250 (depending on the type of claim) with a hearing fee of £230 or £950 being payable if the claim reaches the stage of a full hearing. Tribunal fees are payable only by the employee, which can be seen as unfair on the basis that while an employee is asked to “put their money where their mouth is” when raising a claim, an employer can defend a claim even on spurious grounds without having to pay any up-front fees. While there is a fee remission system in place for individuals with very limited means, the thresholds for qualifying for remission are low. Employees who, for example, have a partner who is working full-time, or a relatively modest level of savings, are unlikely to qualify for remission. This has led to concerns about access to justice for a significant proportion of employees who may have legitimate claims but are deterred from taking action because of the costs involved.

The impact of the introduction of Employment Tribunal fees

The concerns about access to justice are on the face of it supported by the figures for the number of claims lodged following the introduction of fees. The Tribunals Service recorded an 81% drop in the number of claims accepted in the last quarter of 2012/2013 following the introduction of fees (although this drop is likely accounted for in part by the reduction in mass equal pay claims). Both the Law Society of Scotland and Citizens Advice Scotland have called for the fees to be abolished (see here and here). In England, Unison has been pursuing an application for judicial review of the fees regime through the courts (recently dismissed by the Court of Appeal, but with a possible further appeal to the Supreme Court). The UK government commenced a review of review of the impact and effectiveness of employment tribunal fees and the fee remissions scheme in June 2015 with a view to consulting on any proposals for reform to the fees and remissions scheme once the review is completed later this year.

What will happen if the Scottish government abolishes fees?

If the Scottish government goes ahead with its proposal to abolish tribunal fees, the recent drop in the number of claims in Scotland is likely to be reversed to an extent, increasing the workload of the Scottish tribunals. There are concerns that, if tribunal fees are abolished in Scotland, this may lead to employees ‘forum shopping’ in order to raise a claim. Under the current tribunal rules, an employee can bring a claim in Scotland if the employer resides or carries on business in Scotland or if one or more of the acts or omissions complained of took place in Scotland. These rules mean that an employee could raise a claim against an employer that is headquartered in Scotland, even if the individual is based elsewhere in the UK. An increase in claims will have an impact on the public purse and it is unclear from the current Scottish government proposals how the tribunal system will be funded if responsibility is devolved. Nevertheless, regardless of how a new system is to be funded many will feel that it is better to have a system which places employees and employers on an equal footing.

If you are an employee wishing to raise an Employment Tribunal claim, or an employer facing a claim, ELP Arbuthnott McClanachan can provide practical and straightforward advice and support. Please contact one of the solicitors on our Employment Law team on 0131 554 8649 or email us at enquiries@elpamsolicitors.co.uk for a no-obligation discussion.

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