31st July 2017

Supreme Court rules that Employment Tribunal fees are unlawful

The Government introduced fees for Employment Tribunals in 2013 under then Lord Chancellor Chris Grayling which led to fees of up to £1200 being charged should an employee wish to bring a claim unless they qualified for a fee remission based on disposable capital and monthly income.

The reason given for the introduction of fees was in order to cut the number of claims brought maliciously and to avoid employers having to defend weak and vexatious claims. Over the course of the 4 years that the fee system has been in place, the Employment Tribunal has seen a 79% reduction in claims.

Since the introduction of Tribunal Fees, there have been a number of challenges to their lawfulness on the basis that they restrict access to justice. These challenges culminated in Unison’s victory against the Government in the Supreme Court on 28th July 2017 following appeals against their challenge in the High Court and the Court of Appeal, the latter taking place in August 2015. The Supreme Court ruled that the introduction of Tribunal Fees in 2013 was unlawful from the beginning as it prevented individuals obtaining access to justice.

The Supreme Court took into account evidence including a consultation paper from the Ministry of Justice in January 2017 which confirmed, amongst other things, that individuals receiving a fee remission were much lower than anticipated, that the contribution that Tribunal Fees made to the costs of running the Tribunals was significantly less than expected, that unmeritorious claims had not been deterred and that ACAS settlements had not noticeably increased.

The immediate effect of this decision is that Tribunals have stopped accepting fees when hard copy claims have been presented in person. The Lord Chancellor was also required, as part of the Supreme Court decision, to provide an undertaking that all fees paid would be refunded back to 2013; a cost which has been estimated at £27 million.

For employers, this may cause some concerns. In effect, we now have gone back to the position as it was pre-July 2013 before Tribunal Fees were introduced. Employees will now be entitled to bring claims without the payment of a fee. We are not expecting this to remain the same for an extended period and it is likely that the Government will move to bring in a reduced fee structure. What will be of concern for employers is that this reduction may be subsidised by requiring employers to pay a fee on the lodging of their ET3 defence. In addition, the Employment Tribunals Service will be required to carry out a full overhaul of the online Claim Form system and the Tribunal Rules to take account of the fact that fees are no longer payable. Employers should keep an eye out for updates from the Government and the likely announcement of a consultation on the fee structure to ensure their voices are heard.

 

*All information is correct at the time of publishing

Chris King

Employment Law Specialist

Chris is one of our Employment Law Specialists from Napthens Solicitors. Read more

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