Employment Tribunal Fees Unlawful

On 26th July 2017 the Supreme Court declared that the introduction of tribunal fees was unlawful, discriminatory and must be quashed with immediate effect.

Background The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 (“the Fees Order”) introduced employment tribunal fees in the UK on 29 July 2013. This meant in order to bring a claim, there was an initial issue fee of up to £250 and a further hearing fee of up to £950 to pay to set the case for trial. The objectives of the fee regime were to transfer the costs of the tribunals away from taxpayers to service users, to encourage early settlement between the parties and to deter weak or vexatious claims.

However, the trade union, Unison, argued that the Fees Order was unlawful on the grounds that it interfered unjustifiably with the right to access to justice and that it was discriminatory. After a four-year legal battle with the government, Unison has succeeded with its challenge. Agreeing with Unison, the Supreme Court judges unanimously held that the introduction of fees had been unlawful and unconstitutional. Making its decision, the Supreme Court considered Unison’s statistical evidence that since the introduction of the fees, tribunals had seen a dramatic 70% decrease in claims. It agreed that the fall in claims was so sharp, substantial and sustained it demonstrated that the fees were unaffordable and prevented access to justice. The Supreme Court also held that the Fees Order could not be justified as the fees had been set so high that they “had a deterrent effect upon discrimination claims, among others” and had put off more genuine claims than the vexatious claims that the fees were meant to deter. Considering the discriminatory aspect of the argument, it was agreed that the fees system of charging higher fees for ‘Type B’ claims (such as discrimination and unfair dismissal) than ‘Type A’ claims (such as breach of contract) was indirectly discriminatory against women who are more likely to bring ‘Type B’ claims.

What now? Employment tribunal fees as we have known them are no longer applicable and the online system with the fee requirement removed is now already up and running. Furthermore, the government is now tasked with the logistical nightmare of refunding an estimated £27 million to the people who have brought claims in the employment tribunals since July 2013. It may be the case that the government seek to implement a revised fees regime in the future. What such a new regime will look like is unknown at this stage but it will have to be at a lower level so not to restrict access to justice. Advice for employers With the fees now abolished, employers should proceed with extra caution when dealing with employees as there will inevitably be a rise in the number of employment tribunal claims going forward.

However, it is not just new claims that employers should be wary of. Employees who were previously prevented from bringing claims due to the fees and would now be out of time may try to argue that it would be “just and equitable” to allow them to bring the claim now.Comment This is a major victory for Unison on behalf of all employees in the UK and emphasises the importance of access to justice for all. However, although a rise in employment tribunal claims is anticipated, it is probably unlikely that they will return to the levels seen before the introduction of the fees. All employment disputes are now required to go through the ACAS early conciliation process which is often successful in achieving early settlement before a tribunal claim is submitted. Perhaps employers will now be making more use of this facility in the months ahead.