Employment Tribunal deposit order – an overview

An Employment Tribunal deposit order can be applied in circumstances when an Employment Judge has determined that an ‘allegation or argument in a claim or response has little prospect of success’.  Applying a deposit order means that in order to pursue that allegation or argument the party making it must pay a sum of money in order to do so.

How is it decided that an allegation or argument has little prospect of success?

Essentially, in order to apply an Employment Tribunal deposit order, an Employment Judge must have a proper basis for doubting that the party will be able to establish ‘the facts essential to the claim or response’

A basic example would be a Respondent arguing that the Claimant was not a disabled person in circumstances when the Claimant had already provided evidence from various Healthcare professionals confirming that was so.

 Another example may be a Claimant alleging unfair dismissal in circumstances when there was evidence indicating that the Claimant had an insufficient length of service to bring an unfair dismissal claim.

In the examples above, the Employment Judge may find that a deposit order would be appropriate. However, it may well be that the facts are not as clear cut as the basic examples above. Where there is a dispute between the parties, relating to central facts, and therefore witness testimony is needed to resolve the issue, an Employment Tribunal deposit order may not be the most appropriate course of action.

How much money will need to be paid in order to pursue allegations or arguments that are subject to an Employment Tribunal deposit order?

The maximum that can be charged is £1,000 for each allegation or argument that is subject to a deposit order. The maximum amount is set in the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013.

The regulations require the Employment Judge to consider the paying party’s ability to pay before deciding what the amount of the deposit order should be. This assessment would involve a consideration of the paying party’s income and or assets. The paying party may also be asked to provide documentation, such as financial statements, to confirm what the position is.

It is for the Employment Judge to decide what the appropriate amount should be, subject to the maximum amount referred to above, but the amount should not be so high that it prevents the paying party from pursuing the allegations or arguments in question. Therefore, the amount of the deposit may be substantially less than the maximum permitted.

When will the money be required in order to pursue the allegation or argument that is subject to an Employment Tribunal deposit order? 

The amount of an Employment Tribunal deposit order, and when the sum is payable, will be set out in writing in a case management order which will be sent to the parties.

What happens if the sum specified in the Employment Tribunal deposit order is not paid?

If the sum specified in the Employment Tribunal deposit order is not paid, the Employment Tribunal will not permit the allegation(s) or argument(s) to be pursued at a final hearing.

When can an Employment Tribunal deposit order be raised, and by whom?

An Employment Tribunal deposit order can be raised at any stage in the proceedings. An application can be made by the parties to request that an Employment Tribunal deposit order is granted. However, a deposit order may be made without an application being made by one of the parties. This is because Employment Judges can apply an Employment Tribunal deposit order when they consider such steps to be appropriate in the circumstances.

An Employment Tribunal deposit order and Employment Tribunal costs

Generally, in Employment Tribunal cases, the party that wins will not be able to recover their costs from the other side. However, whilst the recovery of costs remains the exception rather than the rule, there are circumstances when it is possible.

An example may be if the Employment Tribunal concludes that the losing party behaved unreasonably. This issue may be particularly relevant in circumstances when allegation(s) or arguments were subject to an Employment Tribunal deposit order, the deposit was paid, and those allegation(s) or arguments were heard at a final hearing but were unsuccessful. In such circumstances, the winning party may argue that it was unreasonable to pursue allegation(s) or arguments that were subject to a deposit order because they were thought to have little prospect of success.

In such circumstances, when an Employment Tribunal deposit order has been applied, it is necessary to carefully consider next steps

Can the imposition of a deposit order be appealed?

Whether an appeal to the Employment Appeal Tribunal would be appropriate would depend entirely on the individual circumstances of the case. However, in appropriate circumstances, it is possible to appeal decisions relating to Employment Tribunal deposit orders.

It is important to note that the Employment Appeal Tribunal can only consider an appeal in circumstances when it is alleged that there has been an error of law – this means that it is not possible to appeal simply because you dislike the decision. In contrast, an error of law may be that the Employment Tribunal did not properly consider the paying party’s ability to pay, or alternatively that the Employment Tribunal was not in possession of the essential facts necessary to conclude that the allegation or argument has ‘little prospect of success.’

It is important to be aware that the Employment Appeal Tribunal has strict time limits that need to be adhered to and has various procedures that must be followed in order to pursue an appeal.

Plotkin & Chandler works exclusively in the areas of HR and employment law and assists both employees and employers.

If you are considering applying for an Employment Tribunal deposit order, or one has been applied against you, or you would like to discuss pursuing an appeal in relation to an Employment Tribunal deposit order, we can help.

Please contact us on 020 3923 8616 or via email on info@plotkinandchandler.com to discuss your needs and the ways in which we can help.