Employment Tribunal Fees – Nine Questions And Answers


The Law Of… taking your employer to a tribunal

The Supreme Court Judgement in relation to employment tribunal fees has really hit the headlines. It represents the culmination of a lengthy legal battle following the controversial introduction of the fee system in July 2013.

The previous system of charges for employment tribunals have now been deemed unlawful, which will lead to a big shake up in the employment law arena.

We explore what this landmark decision could mean for employers with the help of our specialist Employment Law Solicitor, David Hession, who answers questions about this divisive topic.

The Background To Employment Tribunal Fees

The coalition Government introduced the employment tribunal fee system in July 2013. The Government’s rationale at the time was that this would help to shift the burden of paying fees from the tax payer to claimants. It was also argued that this would help to reduce the number of vexatious or nuisance claims that were being brought before the tribunal.

Under the fee system, claimants are required to pay an issue fee of £160 and a hearing fee of £250 for the more straightforward claims. More complex claims are charged at £230 on issue and £950 for the hearing fee.

What Impact Have These Fees Had?

There is little doubt that the tribunal fee system has led to a substantial reduction of the number of tribunal claims that have been issued. The percentage reduction in the number of claims has ranged from 66% to 70%.

Trade unions have perhaps been the most vocal in terms of their opposition to the tribunal fees – but it is difficult to find an employment lawyer who actually supported the imposition of fees. The argument runs that this has had an adverse effect on workers’ access to justice, restricting workers or employees in their ability to enforce their statutory employment rights.

Is This The First Legal Challenge To The Fee System?

Previous challenges have been made by Unison both in the Employment Appeal Tribunal and the Court of Appeal. On both occasions, the courts found that the fee system was not unlawful. One of the reasons behind this that there was a lack of evidence to suggest the fee system had made it unaffordable for claimants to bring claims.

This was backed by a remission system, making it possible for some claimants (i.e. those on a lower income and with minimal assets) to claim a fee exemption. Up to now, the courts are generally accepting that fees may make more people less willing to make a claim. But, in their view this did not translate as people simply being unable to afford tribunal fees.

What’s The Big Deal About The Latest Decision?

This week’s decision has taken many by surprise, not just employment lawyers. The imposition of fees by the Government is part of a growing trend, not just in employment law but also in areas of personal injury and general litigation.

This latest decision has been seen by some as a slap in the face for the Government. Rather than endorsing the fee system, the Supreme Court has issued a strong rebuke by declaring the fee system unlawful.

The decision resonates far further than employment law circles. It serves as a reminder that the Government is answerable to the judiciary and that any Government legislation should be lawful and constitutional. In this sense, the courts have stood up to our law-makers.

Why Was This Decision Reached?

In short, the Supreme Court found that the current fee system prevented potential claimants from asserting their statutory rights. They failed to accept the findings of the previous courts that there was insufficient evidence to suggest that litigants could not afford court fees.

In addition, it was found that the current fee system was not just incompatible with EU law, but also indirectly discriminatory on women who are statistically more likely to bring a discrimination claim against their male counterparts.

What Consequences Will This Have? 

The Government has said that it will look to comply with the decision and that the fee system will be scrapped at the earliest opportunity. Time will tell whether the Government looks to reintroduce a different fee system.

Will Claimants Get Their Money Back?

As a further measure, any fees paid by a claimant under this system will be reimbursed by the Government. It is estimated that this will cost somewhere in the region of £27million to £32million. Whether this will involve a cheque being delivered to claimants’ front doors will remain to be seen.

Also, it is not clear what will happen to the large number of claimants whose claims have settled. Their settlement terms could have already included a provision for their tribunal fee. It is likely that the Government will have little or no way of finding out this information other than asking the parties themselves. This will prove very time-consuming and difficult for the Government.

Can Historic Claims Be Revived?        

This is a difficult question and has no simple answer. If, for example, an employee was dismissed in May 2016 when the fee system was in place, they may have been unable to afford bringing a claim at that time due to the fees. It is not immediately clear whether that individual can then bring a claim going forward without having to pay a fee.

This example poses a number of possible problems for the Government. Firstly, this would inevitably lead to a very large number of claims being issued. This would cause obvious problems for the employment tribunal system and the limited judicial resources that it has.

Secondly, it is not clear how this would sit with existing strict tribunal time limits. These limits generally run at 3 months less a day subject to any ACAS early conciliation period. There are exemptions in relation to these time limits (with different tests being applied for unfair dismissal and discrimination), but it is not clear whether the courts will allow this specific scenario to sit within these exemptions.

One possible outcome is that the Government agrees to backdate claims on receipt by the claimant of evidence of an intention to bring a claim. Typically, this could be a grievance or an ACAS early conciliation certificate.

Who Are The Winners & Losers?

Employees have clearly had a victory here and employees should now be able to bring a claim against their employer or former employer free of charge. On the other hand, business groups and some employers will perhaps look at this decision with a touch of trepidation. Conscientious, decent employers may well be confident in the fact that this ruling will make little difference in practical terms.

It appears unlikely that this ruling will lead to a huge deluge of claims being issued overnight, but a surge in claims over the next few years is expected. There could well be a substantial increase in claims particularly of lower value, such as breach of contract and unlawful deductions claims.       

Is This An End To The Fee System?

In theory the Government could look to re-impose fees at a later date. This could be done at a lower rate or by exempting certain types of claims such as any claims in relation to pregnancy/maternity rights. In doing so, the Government stands a greater possibility of such a system being deemed to be lawful by the courts.

David comments:

"On a political level, it is possible that the Government may simply accept defeat on this issue."

"In light of the current fragility of the Government’s parliamentary majority and Brexit, it is very possible that the appetite for any revised legislative measure in this area will be lukewarm. There is also the risk that the Government could face a public backlash by seeking to reintroduce legislation (albeit in a slightly different form) that has already been ruled unlawful."

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