Employment Tribunal Fees Are Unlawful

The Supreme Court has held that employment tribunal fees are unlawful.

This development will have a huge impact on the world of employment tribunal claims and employers’ employment law risks.

In June 2013, the Government introduced fees for employment tribunals.  This meant that someone bringing an employment tribunal claim had to pay an issue fee and then a further listing fee for the case to be heard.  For some cases, the cost of this was as much as £1,200.  The introduction of employment tribunal fees resulted in an overall reduction of employment tribunal claims by up to 70%.  As a result, Unison brought a case arguing that the fees were unlawful as they restricted access to justice.

The Supreme Court has now heard the appeal by Unison against the Court of Appeal’s decision that employment tribunal fees would continue.

In a surprise decision, the Supreme Court has agreed with Unison and ruled that tribunal fees are unlawful and have struck them down with immediate effect.

The Supreme Court’s reasons for this decision include:

• Employment tribunal claims are important for society as a whole, not just the individuals involved.
• Tribunal fees prevent access to justice (as evidenced by the sharp and sustained drop in the number of employment tribunal claims).
• Tribunal fees do not appear to have improved the proportion of cases which have settled through ACAS.
• The Government failed to show that fees met the other objectives for their introduction, such as deterring weak claims.
• Tribunal fees are indirectly discriminatory by charging higher fees for type ‘B’ claims (which include discrimination claims) than type ‘A’ claims.

As a result of this decision fees cease to be payable for claims in the tribunals and in any appeals to the EAT.  Furthermore, all tribunal fees paid in the past since 2013 must be reimbursed by the Lord Chancellor’s Department.

However, some questions remain unanswered such as what to do about fees moving forward.  The Supreme Court judgment does not mean that we won’t ever see any tribunal fees again.   The Courts and Tribunal Service may decide that it will not reintroduce fees.  On the other hand, it could bring in a new fee regime at a lower level and it may even split the fees between the employer and employee.  Another idea being proposed is possibly using a scale of fees linked to the value of claims, as those utilised in the small claims courts.

There is also the question of what happens to all those people who chose not to bring a claim because of the fees.  The employment tribunals may decide to let them bring their claims now, so watch this space. Tribunals could be about to be deluged by new and backdated claims, which will be a massive challenge for employers and the Tribunal Service.

The implication for employers

Time will tell as to what impact this decision will have on the number of employment tribunal claims, but we could see a big increase over the next few months.

The most obvious concern is that difficult employees will bring many more claims because they can do so at no cost to themselves, now the financial barriers have been removed

By ensuring your practices are fully aligned with legislative requirements you will reduce the risk of potentially costly tribunal claims.

Therefore, as an employer you should now more than ever, be taking advice from employment experts before dealing with an employee concern or dismissing an employee.

The implication for employees

As there is no longer an issue fee, as a worker you may be more willing to issue a claim with the knowledge that an employer is more likely to agree a settlement payment to make the claim disappear rather than spend thousands on the cost of defending the claim.

The removal of tribunal fees may result in settlements being reached a lot quicker when tribunal claims have been lodged.

Contact us

We have an experienced employment law team who are able to provide advice and practical support to employers of all sizes and in all sectors.  The advice we provide is commercial, cost effective and tailored to suit the needs of your business.

For a fixed annual fee you get almost unlimited specialist employment law advice and HR support delivered by experts.

If you have further questions on this topic or on our services then please contact Reyhana Koser either by sending an email to reyhana@bradleyhayneslaw.co.uk or by telephone on 01905 900919

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at 7 August 2017. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.