In some ways, it is not the news that employers wanted to hear. Employment Tribunal and EAT fees are to be scrapped after the Supreme Court unanimously ruled that they are unlawful and prevent access to justice.
This ruling has sent shockwaves through the world of employment law and beyond, in what is one of the most momentous (and surprising) decisions in recent years.
Following the introduction of fees in July 2013, Claimants have had to pay an initial upfront ‘issue’ fee and then a ‘hearing’ fee later down the line for pursuing a claim. This amounted to £1,200 for unfair dismissal and discrimination claims – before this date, access to the tribunals was free of charge.
With one of the reasons for introducing fees being to act as a deterrent to vexatious and frivolous claims, the charges have had the desired effect – there has been a sustained and dramatic fall (by around 70%) in the number of claims each year, compared to pre-fee levels.
Until now, Unison the trade union, has been unsuccessful in its challenges (in both the High Court and Court of Appeal) that fees prevented access to justice, especially to lower paid workers and they also indirectly discriminating against certain groups, in particular women.
The Supreme Court, however has now agreed with Unison.
So, what happens now?
There are a number of points to consider:
- In response to this decision, the government has stopped taking fees for claims (and appeals to the EAT) moving forward and will begin the process of refunding all individuals who have paid fees since 29th July 2013. It has been reported that this will amount to a whopping £32million! Where this money will come from has not been confirmed.
- It is not clear how the government will deal with cases where fees paid by a claimant, were subsequently reimbursed by the respondent, either under a tribunal order or settlement agreement – which means employers could be out of pocket.
- It is predicted that the number of tribunal claims being brought against employers will significantly increase. Although, we are sceptical of this number going back to the high levels we saw pre-fees, especially given the important and valuable role ACAS early conciliation does in preventing potential claims going further. Currently there are no plans to change the early conciliation scheme and it will remain.
- Employers should also be aware of would be claimants from the past, who decided not to pursue a claim at the time because they could not afford the fee or were put off because of the fee, and whether they could now look to pursue their claims. These potential claims would be outside the normal three month time limit to issue, but the tribunal can apply the “just and equitable” test in considering whether to allow the claim moving forwards.
If anything, this decision is a warning to employers to revisit their current HR policies and procedures, and ensure they are properly followed in practice, and in some cases take a more risked based, cautious approach to managing employment disputes moving forwards.
Find out more
To discuss the steps you should be taking in more detail, contact Berwins’ employment team for expert advice on the practices and policies which should be in place.
Alternatively, we will be revisiting this decision and the impact it has had as part of our employment update seminar, run in partnership with North Yorkshire CIPD, in Harrogate on 28th September 2017 – so register to attend for free
Mike Patterson is an Associate Director in Berwins’ Commercial Team. He is ranked in leading industry directories and specialises in Employment and HR law.