Supreme Court rules Employment Tribunal fees are unlawful

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Paman Singh, an employment law solicitor at Law At Work reflects on the decision by the Supreme Court to rule Employment Tribunal fees are illegal. The Supreme Court, the highest Court in Great Britain has ruled that Employment Tribunal fees introduced by the Government in 2013 are unlawful in their current state. From 2013 until today, claimants wishing to bring a work place claim before the Employment Tribunal (and Employment Appeals Tribunal) had to pay a fee before their claim would be heard.

These claims were separated into two bands; Type A and Type B.

  • Type A claims were the more simple of the two, and included unpaid wages and breach of contract. Fees for this type of claim cost £390, made up of an initial lodging fee of £160 and a hearing fee of £230.
  • Type B claims were more complex claims, typically cases such as unfair dismissal, discrimination and equal pay. It cost £1,200 to bring one of these claims, with an initial fee of £250 and a £950 hearing fee.

If a claimant was unable to pay these fees then the law required the claim to be rejected.

There have long been serious concerns about the impact of tribunal fees on the access to justice for claimants. In 2015, ACAS published the results of a survey in which more than two thirds of the claimants who approached them for early conciliation stated that they did not pursue a case because they could not afford the fees. The Government commission a review of the fees structure and published a Report paper in January of this year. The Report stated “there is no conclusive evidence that people have been discouraged from bringing claims by ET fees”.

UNISON challenged these fees on the basis that since the fees regime had been introduced, claims being brought before the Employment Tribunal had fallen off a cliff, with a near 70% reduction in the number of claims presented but were initially unsuccessful. The Court of Appeal also dismissed the union’s appeal.

The Supreme Court however were concerned by a potential infringement of the right of access to justice for individuals. Simply put, that the costs were so high and disproportionate that it was preventing people with legitimate claims coming forward to exercise their rights. The Court were not impressed by the Government’s argument that the fees served as a sifting method for weeding out frivolous claims.

The Court also found that the current fee structure indirectly discriminated against women. Namely, as it was shown that women were statistically more likely to bring a discrimination claim and at a cost of £1200 to bring a discrimination claim, they may be discouraged.

The Court stated that deterring people from bringing discrimination claims was in fact discrimination in itself. Following this judgement, the fees scheme has been immediately quashed and the Government will have to repay nearly £30 million that has been paid by claimants since the scheme was introduced.

Whilst there has been no confirmation about the Government’s next steps, it is unlikely that the fees regime will be completely abolished. The Supreme Court did not completely rule out Employment Tribunal fees, just the current levels. In all likelihood the Government will consult on a revised level of fees and perhaps split the different types of claims even further to ensure that the most basic of claims such as those where there is no financial reward are not cost prohibitive for claimants. The Government may also look to levy a charge on employers to defend claims to minimise the financial impact of this judgement.

All claims since July 2013 will need to be reviewed by the Government and employers may be entitled to some form of rebate where they lost the claim and were ordered to pay the claimant’s fees.

It is expected that there will naturally be an upswing in the number of claims now being pursued so employers will need to ensure that they follow best working practices and take relevant advice in relation to employment law matters. There may also be more of an incentive to engage in meaningful conciliation through the ACAS Early Conciliation process prior to any claim being lodged.

The judgement also opens up the possibility of employees seeking to lodge historic claims outside the three-month time limit, possibly arguing that it was not reasonably practicable to bring a claim previously because they were deterred from doing so by the (unlawful) fee structure.

By |2017-07-26T14:43:45+00:00July 26th, 2017|Employment Law, News, Tribunals|0 Comments

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