Unpaid wages claims – employment tribunal or small claims court?

by Laurie Anstis on April 30, 2013

Claims for unpaid wages can be brought in either the courts or the employment tribunal.

In the past, most such claims have been brought in the employment tribunal. Only very large claims have been brought in the courts. One of the reasons for this is that there has been no fee payable to bring a claim in the employment tribunal, but fees have always been charged for claims brought in the courts.

From the end of July (probably – that’s the best date we’ve got at the moment) things will change. Employment tribunals will start to charge fees too. For a claim for unpaid wages there will be an issue fee (paid at the start of the claim) of £160 and a hearing fee (paid at part way through the case) of £230.

The fees that need to be paid in the courts vary. Assuming the claim is below the small claims limit (now £10,000), and that the claim is submitted online, the issue fee is between £25 and £210 and the hearing fee is between £25 and £325. There might also be an allocation fee of £40. The precise fee depends on how much you are claiming.

Currently the issue fee for claims of up to £5,000 is lower in the courts than in the tribunal, and the hearing fee (including the allocation fee) for claims up to £3,000 is lower in the courts than the tribunal.

Taking both together, claims up to £3,000 have lower fees in the courts than in the tribunal. The lower the value of the claim, the greater the difference is.

Once employment tribunal fees come in, it will be more financially attractive to bring unpaid wages claims of up to £3,000 in the courts rather than the employment tribunal. Given that many such claims will settle or result in a default judgment before the hearing fee is payable, that could even be argued of claims up to £5,000.

A few extra points:

1 This is based on the court fees as at 30 April 2013 and the expected employment tribunal fees. Any changes to fees in the future will affect these calculations.

2 Fees may not be payable (or may be reduced) for people with a low income.

3 There’s quite a difference in procedure and rules between the courts and the employment tribunals, which means that fees are far from the only thing to consider when deciding which jurisdiction to submit a claim to.

4 Often unpaid wages or notice pay claims are brought at the same time as other claims, such as unfair dismissal. There is no extra fee to be paid for bringing an unpaid wages claim on top of another claim in the employment tribunal – so it is still likely that more unpaid wages claims will be decided by the tribunal rather than the courts.

5 This is based on the position in England and Wales. Things are different in Scotland.

Finally, it is a long time since I’ve carried out any court litigation. I’ve just got my figures on court fees from publicly available sources. I’d appreciate comments from anyone more familiar with the court system if I’ve got my figures wrong on the court fees.

For more about employment law, check out my recommended books.