Employment Tribunal Fees Ruled Unlawful

An appeal by Unison against the legality of Employment Tribunal fees has been granted by the Supreme Court, who has ruled that the fees introduced in 2013 are unlawful.

Background to the judgment

In 2013, the Government brought in Employment Tribunal fees in an attempt to reduce the number of weak and malicious cases that were being brought against Employers.

However, overall, due to the high level of the fees, it has led to a 79% reduction in the number of cases which was a much higher impact than ever anticipated and was in fact seen as a regime that was prohibitive to some potential Claimants.

Following a lengthy challenge in the courts by the union Unison, the Supreme Court has ruled that Tribunal fees are unlawful. The Supreme Court has ruled that the high level of fees is unlawful as it prevents access to justice for Claimants. It was also held that fees has prevented the ability to enforce European rights and is therefore unlawful under European Law.

What is the impact of the judgment?

It is unlikely that tribunal fees will be abolished entirely and it is more likely that the Government will commence consultation as to how to change the system that was introduced.  Many commentators believe there will be some smaller fees but that if fees continue it would be more along the lines of the small claims regime rather than the current regime that is in place which sees many Claimants having to pay in excess of £1,000 if their claim proceeds to a final hearing. It could also decide that the Employer must pay a fee when it lodges the Response to any claim.

In the meantime, any fees which have been paid by Claimants since 2013 will have to be refunded to them by the Government and the Lord Chancellor has confirmed this will happen. The overall cost of the fees paid is estimated at £32 million. This could however take some unpicking though because in successful claims the Respondent may have picked up the fees paid by the Claimant.

There is also a very interesting issue to be considered and this is what happens with all the employees who decided not to bring a claim because of the level of fees. Will they now be given an extension of time to submit their claims? This could result in further historic claims being issued against businesses.

It is very important that companies do protect themselves as far as possible to cover the possibility of claims being made against them. They need to ensure that all of their policies and procedures are up to date. In particular, it is important that when bringing an employee’s employment to an end, that they do it lawfully. Unfortunately a decision like this is not good for Employers because there will be an increase in the number of Employment Tribunal claims being made so the need to protect your business is all the more important.

Further Advice

If you require any advice on this issue or would like to discuss updating your policies and procedures, please call Amy Hallam or Glenn Jaques our specialist Employment Directors on 01246 555111.