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Employment tribunal fees – what next?

Published 21 August 2017

I am sure most people have heard the news about the landmark and significant decision that was handed down last week by the Supreme Court, in the case of R (Unison) v Lord Chancellor (2017)(1). This is where they unanimously found that employment tribunal (ET)(2) fees prevent access to justice and where unlawful.

The immediate effect of this decision is that employment tribunal fees will no longer be payable including appeals to the Employment Appeals Tribunal (EAT)(3) and more significantly fees paid in the past, amounting to £32 million, will have to be reimbursed by the Government.

Justice minister Dominic Raab said the government would stop taking fees for employment tribunals ’immediately’ and begin the process of reimbursing claimants, dating back to 2013.

Background

The fees were first suggested by George Osborne in 2011 and were then introduced in 2013 by the collation government, after the consultation process and strong lobbying from business.

The government claimed that the introduction of the fees would:

  1. Transfer some of the costs burden of operating ETs and the EAT to those who use the system;
  2. Incentivising earlier settlement of claims; and
  3. Disincentivising the bringing of weak or vexatious claims.

The government decided on two types of fees, Type A and Type B, with Type B being for unfair dismissal and /or discrimination claims with an issue fee of £250 and a further fee of £950 for setting the matter down for a hearing. Therefore, the ET fees alone could be up to £1,200 for a claimant.

Claimants could apply for remission of fees if their disposable capital and gross monthly income were both less than specified amounts, however, this process was long winded and was not an easy process to go though.

Following the introduction of the fees the statistics were blatantly obvious and showing that there was a significant reduction of over 70% of claims being brought at the employment tribunal, which from a business point of view was great news.

Unison’s challenge to the Fees Order

The trade union Unison(4), sought a judicial review of the Fees Order on the grounds that it was unlawfully, preventing or restricting access to justice and this was started on 28th June 2013 shortly after the fees introduction.

It was a long fight for Unison and eventually the Supreme Court(5) decided in their favour on domestic common law principles thus making it ‘Brexit-proof’.

Some of the key points from the judgment in summary:

  1. The government was acting unlawfully when they introduced fees for employment tribunal cases,

  2. Claimants would not bring cases to employment tribunals because paying the fees would render the compensation element futile,

  3. Claimants with low incomes could not afford the fees,

  4. Lady Hale, who will serve as the new president of the Supreme Court in October 2017 stated that the employment tribunal fees regime resulted in indirect discrimination against female employees.

This decision now leaves lots of unanswered questions:

  • What will happen if a client paid a fee and how will they be reinfused?
  • What will happen if the respondent paid the fee to the winning claimants?
  • What will happen if the claimant paid the fee and then settled the claim?
  • What does a claimant do if they want to bring a claim today?
  • What can a claimant do they were put off by the tribunal fees and had a valid claim against their employer?
  • What will happen if your claim was struck out because the fee was not paid?

This will obviously keep the legal profession busy for some time to come.

The likelihood now is that the number of employment tribunal claims will start to increase as a result of this decision, so what will this mean to employers and businesses.

I have been involved in hundreds of dismissals over the years working for both the employers and the employees and the practical advice I would give arising out of this decision is to make sure that you take your time in getting the internal process done properly.

This means collecting the right information during a full and proper investigation, ensuring that you have the right information when making the decision at the hearing and any subsequent appeal. Sometimes it make take a little longer but if you get this right the chances of ending up at an employment tribunal are significantly reduced.

References

  1. Court TS. R (on the application of UNISON) (Appellant) v Lord Chancellor (Respondent) - The Supreme Court [Internet]. Available from: https://www.supremecourt.uk/cases/uksc-2015-0233.html
  2. Employment Tribunal - GOV.UK [Internet]. Available from: https://www.gov.uk/courts-tribunals/employment-tribunal
  3. Employment Appeal Tribunal - GOV.UK [Internet]. Available from: https://www.gov.uk/courts-tribunals/employment-appeal-tribunal
  4. UNISON - the public service union [Internet]. UNISON National. Available from: https://www.unison.org.uk/
  5. Court TS. The Supreme Court [Internet]. Available from: https://www.supremecourt.uk/

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