The Supreme Court has decided that Employment Tribunal fees are unlawful and should be scrapped

The decision has been welcomed by employees and trade unions, but has understandably caused employers a lot of concern.

Recap

Prior to July 2013, it was “free” to bring an Employment Tribunal claim. That changed when fees were introduced in July 2013. Claimants were required to pay a fee of up to £1,200, depending on the type of claim. The fees deterred many claimants from making a claim, which was positive news for employers. Before fees were introduced, the average number of cases taken to tribunal was about 5,000 a month; this fell to about 1,500 a month after fees were brought in.

Supreme Court decision

Unison challenged the fee system, claiming it was unlawful. In its decision published on Wednesday, the Supreme Court agreed.

  • The Court decided that the fees have the effect of preventing access to justice.
  • In the Court’s view, the fees are unaffordable for many people, and even though claimants can apply for remission from fees, the number of claimants actually receiving remission is very low.
  • The Court found that the effect of the fee system was “a dramatic and persistent fall in the number of claims brought”, and that fees were the most frequently cited reason why employees decided not to make a claim, so acted as an unreasonable barrier in many cases.
  • The Court decided that the fees are indirectly discriminatory against female claimants, because a higher proportion of women bring the type of claims for which the higher fee is payable.

With immediate effect, fees will no longer be charged. The Employment Tribunal Service will need to change the claim forms, and rewrite the tribunal procedural rules. The Government will have to reimburse up to £27million to those claimants who have paid fees since 2013.

What happens next and what does this mean for employers?

Employers welcomed the fee system when it was introduced, and will be nervous about what happens now. Whilst we do not know exactly what will happen next, it is unlikely that fees will be abolished completely, so watch this space. It is more likely that we will retain some sort of fee system, but with much lower fees. What is clear, is that there will now be an increase in claims, because as things stand now, anyone who has been treated unlawfully or unfairly at work will no longer have to pay to take their employer to court.

We have already been asked by some clients whether employees, who were put off making a claim because of the fees, might now be able to persuade a tribunal to accept their claim ‘out of time’ because it was not reasonably practicable for them to bring the claim in a fees regime which has now been found to be unlawful. That seems like an attractive argument for a claimant to make, but it is probably not likely to hold much sway with a tribunal.

There is also the question of whether an employer who settled a tribunal case and agreed to reimburse to the claimant their tribunal fee as part of the settlement, will now have any recourse to get the tribunal fee contribution back from the claimant, given that the claimant will now be able to get a refund from the Government.

Since fees were introduced, employers might not have taken a careful approach when they release staff, and might have made bolder decisions in relation to how they deal with workplace disputes, counting on their employees (or some of them) being put off by the fees and not making a claim. Following this judgment, employers might want to act more cautiously moving forward, certainly until we know what the new system is going to be.

Please get in touch with our Employment team if you have any questions about how this judgment might impact on your business.