National Minimum Wage rate increases and Employment Tribunal fee review
National Minimum Wage
The increase in national minimum wage rates have been announced. From 1 April 2017:
- The national living wage (workers aged 25 and over) increases from £7.20 to £7.50.
- The standard adult rate (workers aged between 21 and 24) increases from £6.95 to £7.05.
- The development rate (workers aged between 18 and 20) increases from £5.55 to £5.60.
- The young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices) increases from £4.00 to £4.05.
- The rate for apprentices increases from £3.40 to £3.50.
The Government have also issued their long awaited review of the effect of the introduction of Tribunal fees. The report concludes that the fees are working well and have broadly met their objective of reducing spurious claims and making the parties contribute towards financing the Tribunal system. The report finds that whilst the introduction of fees may have discouraged individuals from bringing employment tribunal claims, there is "nothing to suggest that they have been prevented from doing so".
In view of the significant drop off in claims the Ministry of Justice has indicated that certain claims under the National Insurance Fund (eg claims for redundancy pay when a company has become insolvent) will become exempt from having to pay fees from 1 February 2017, although no statutory instrument appears to have been made to actually enable this to occur. They are also consulting about whether to widen the fees remission scheme to cover those whose gross monthly income is equivalent to around that of a full-time individual on the current national minimum wage (£1,250 gross per month), with corresponding increases for those living as couples or those with children. It isn’t proposed that this rate increase in line with the national minimum of living wage.
Given that the fees to bring an unfair dismissal claim are £1200 we would not expect an influx of claims as a result of any such change!
UNISON’s challenge to the introduction of fees is due to be heard by the Supreme Court in March 2017 where the Government’s conclusions are likely to be tested.
If you would like to discuss any issues raised in this article, we have specific employment law expertise in advising in this area. For further advice, please contact Angela Gorton.
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.