Ruling: Tribunal Fees Unlawful - What next for employers?

KNOWLEDGE CENTRE

Ruling: Tribunal Fees Unlawful – What next for employers?

September 17, 2017

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At the end of July you will have read that a decision has been reached in the courts on the case brought by Unison regarding how fair it was for the Government to introduce fees for applicants for employment tribunals. The effect being that the Employment Tribunals Fees Order legislation from 2013 has been quashed.

There is no doubt that the introduction of fees was considered to be one of the factors that saw a decline in the number of tribunal cases brought. The effect of less tribunals being a reduction in the cost of the tribunal service to the Government.

The question has been whether fees have put off people who have had a genuine case from accessing justice. This is what the Supreme Court has found in favour of and therefore decided that fees are unlawful.

What was happening?

Claimants were paying an issue fee when submitting an employment tribunal claim and a hearing fee when the claim is listed for a final hearing.

There were two levels of fee, reflecting the expected complexity of the case:

For level 1 claims, the issue fee is £160 and the hearing fee is £230. Level 1 claims include claims for unpaid wages, holiday pay and redundancy payments.
For level 2 claims, the issue fee is £250 and the hearing fee is £950. Level 2 claims include claims for unfair dismissal, discrimination and equal pay.

In addition different fee levels applied to claims involving multiple claimants.

What’s been decided?

In the main judgment, the Supreme Court noted a contrast between the level of fees in the tribunal, and the small claims court (where it is very much cheaper to bring a claim for a small sum of money).

Lord Reed emphasised the importance of the rule of law, and that specific statutory rights granted by Parliament may not be reduced by statutory instrument from a minister. He relied on the fact that employment tribunal cases are important for society as a whole, not just the individuals involved. If the Fees Order prevents access to justice in will be contrary to law.

What will happen next?

On news of the judgement the online system was taken off line. This will need to be reprogrammed as it have been very popular since its introduction.

First, it is unlikely the fees regime will be abolished entirely. It is probable that the government will issue a consultation paper and then bring in a new fees regime, with fees at a lower level and/or involving a fee payable by the employer when the employer lodges its ET3.

Secondly, the Supreme Court made it clear that all fees paid between 2013 and now will have to be refunded by the Lord Chancellor’s Department (and the Lord Chancellor has agreed to do so). This is easier said than done – many successful claims will have had fees ordered to be paid by the Respondent, and there will probably need to be a manual trawl of all decided cases.

Lastly, what about all those people who chose not to bring a claim because of the fees? Will tribunals be amenable to the argument that it was not reasonably practicable to bring a claim when a Claimant was significantly impeded from doing so by an unlawful fees regime? Or that following this recent decision it is just and equitable to extend time for bringing a claim?

We watch this space with interest and will let you know what the developments are.

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