Employment tribunal fees are ruled unlawful

UK Supreme Court - Outside

This week the Supreme Court issued the long awaited outcome of the appeal pursued by Unison, who sought to argue that the Employment Tribunal fee regime acted as a barrier to justice.

The Court allowed the appeal against the legality of the current fee regime, and held that the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013 is unlawful and will be quashed with immediate effect.

The fee regime, which required those pursuing Employment Tribunal claims to pay a fee at the time a claim was issued, and also a higher fee prior to the final hearing, led to a 70% drop in claims issued in the Tribunal.

What does this mean for my business?

Tribunals are no longer accepting fee payments where claims are issued in person, and it is likely that the online claim system will shortly be updated to remove the need to pay a fee also.

In light of this, employers should prepare themselves for an increase in claims issued in the Employment Tribunal where claims have not yet reached their limitation dates. It is anticipated that an increase in unfair dismissal claims is most likely as the fee regime will no longer act as a deterrent to former employees.

What can I do to reduce the risk to my business?

We recommend that employers take the opportunity to review their current policies and contracts in order to ensure that you have a strong foundation for defending claims.

Additionally, employers may wish to reconsider the more robust and risky approach that has often been taken in relation to dismissals and complaints since the overall reduction in claims.

We recommend that employers seek legal advice when contemplating action that could result in an Employment Tribunal claim. It is likely that in most circumstances there will be steps and measures that can be taken to enable you to defend claims that may subsequently be issued.

What will happen next?

It is doubtful that a fee regime will be scrapped in its entirely, and it is likely that the Government will seek to introduce an alternative, more workable system. This may mean a lower fee being payable, or a more accessible remission scheme being introduced for example.

What happens to the fees that have been paid since 2013?

The Supreme Court has made it clear that all fees paid under the regime will be refunded. This is likely to be an arduous task as in many circumstances employers were ordered to reimburse employees for fees paid.

It is estimated that over £27 million pounds will need to be refunded.

What about employees who were deterred from bringing a claim due to the fee regime?

It may be that Tribunals allow employees to extend the usual 3 month limitation period, on the basis that had the fee regime not been in place, they would have issued a claim.

It remains to be seen what approach the Tribunal takes in relation to this issue, which could see a wave of outdated claims being pursued.

Should you wish to discuss how the changes may affect your business directly contact Christine Hart on 01204 527 777 or chart@kbl.co.uk