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Employment tribunal fees 'will boost business'

The Government has launched a consultation on its proposals to introduce a system of fees for individuals who wish to raise a case in an employment tribunal.

Two alternative options for the new fee system have been put forward, which involve either:

· An initial fee of £150-£250 to enable an employee to raise a claim, with an additional fee of between £250 and £1250 if the claim goes to a hearing, and no maximum limit to the award; or

· A single fee of £200-£600, with the maximum award capped at £30,000. Those seeking awards above this threshold would be given the option of paying an additional fee of £1,750.

The stated aim of the proposals is to encourage both parties to work through their issues before reaching the employment tribunal stage, and to discourage weak or 'vexatious' claims.

Commenting on the launch, Justice Minister Jonathan Djanogly said, 'Currently, the UK taxpayer bears the entire £84 million cost per year of resolving other people's employment disputes at tribunals. This is not sustainable'.

Fee waivers will be available to those on low incomes, and the tribunal will have the power to order the unsuccessful party to reimburse the fees of the successful party.

The British Chambers of Commerce (BCC) has welcomed the proposals, arguing that they will boost employers' confidence and encourage them to take on staff.

Adam Marshall, Director of Policy at the BCC, said, 'The average cost for an employer to defend themselves at tribunal is £8,500. However three-fifths of tribunal claims are settled due to high costs, with the average settlement at £5,400. According to BCC research, one in five businesses has been threatened with a tribunal in the last three years'.

However, the TUC has raised its concerns over the likely impact of the new system on lower paid workers.

The TUC's Brendan Barber commented, 'Employment tribunals are a key way of enabling workers to enforce their rights. Government proposals to introduce a fee to lodge an initial claim - and then possibly a further charge for a full hearing - will effectively prevent the poorest and most vulnerable workers from ever being able to get justice'.

'Because the fees will be paid upfront and only refunded if a claim succeeds, the poorest workers and those without union backing will struggle to pay these costs. They are also the most likely to be deterred from pursuing a claim.'

The consultation will run until 6 March 2012.