Will Employment Tribunal fees return in Wales?

On 29 January 2024, the Ministry of Justice launched a consultation into the reintroduction of Employment Tribunal, and Employment Appeal Tribunal, fees. Whilst the proposal is still at the consultation phase, some of you may wonder whether this would apply in Wales.

Wales is currently part of the single legal jurisdiction of England and Wales. The Wales Act 2017 introduced a “reserved powers” model which means that the Welsh Parliament can legislate on subjects which are not reserved to the UK parliament. One of the matters which is reserved is the court system, including its creation and jurisdiction, meaning the UK parliament retains control over whether the single jurisdiction of England and Wales should remain.

The Welsh Government published a white paper last year entitled ‘A New Tribunal System for Wales’. You may wonder whether this impacts on the Employment Tribunal system in Wales. The short answer is no, it does not. The white paper applies to only a number of devolved tribunals, operating under their own legislation known collectively as the “Welsh Tribunals”. Examples include the Mental Health Review Tribunal for Wales and the Special Educational Needs Tribunal for Wales. Crucially however, the Employment Tribunal is not one of the Welsh Tribunals and therefore still falls within the jurisdiction of England and Wales.

Whilst the Welsh Government has made no secret of its desire to see further devolution of the justice system, for now Employment Tribunals in Wales will be subject to the same rules as those in England.

So what are the proposals for the re-introduction of Employment Tribunal fees?

Employment Tribunal fees were previously abolished in 2017 when the decision of R (on the application of UNISON) v Lord Chancellor ruled that the fee for a typical tribunal claim, then around £390, unlawfully restricted access to justice.

If tribunal fees are re-introduced, claimants will pay a more modest fee of £55 to issue a claim in a tribunal, or to lodge an appeal with the Employment Appeal Tribunal, irrespective of the type of claim/appeal or the number of claimants/appellants involved in the claim.

It is proposed that no further fees will be required at any point during tribunal proceedings after the initial payment, unless a party wishes to appeal a judgment, decision, direction or order of the tribunal by going to the Employment Appeal Tribunal. At this point, an additional £55 fee will be incurred for each ground of appeal.

The Ministry of Justice says it has devised the newly proposed fees with the decision of Unison v Lord Chancellor in mind, so as to ensure that the fees remain affordable and proportionate. Those who cannot afford the proposed fees may be eligible for participation in a fee remission scheme under which they can receive either full or partial exemption.

The official reasoning for the proposal is to increase efficiency and bring Employment Tribunals, including the Employment Appeal Tribunal, in line with other courts and tribunals across the UK. However, it is difficult to see how the estimated revenue, at only £1.3-1.7m per year, will have much impact on the backlogs and administrative problems facing tribunals.

The more likely motivation for the reintroduction of tribunal fees may lie in their use as a soft deterrent for vexatious and serial claimants. Following the abolition of the previous fee regime in July 2017, the number of Employment Tribunal claims rose by 90%. This increase, together with the further increase in claims seen during the Covid-19 pandemic, coupled with budgetary constraints, has led to less vetting of newly issued claims before they reach the preliminary hearing stage.

This has, as well as increasing the burden on the tribunal, led to increased costs and wasted resources for respondents in defending unmeritorious claims which have little prospects of success or claims where the claimant may have insufficient service to bring the claim. To some extent, the introduction of a modest fee may deter such claims.

The Ministry of Justice’s consultation is due to close on 25 March 2024 with any changes to be implemented as soon as November 2024.