The Supreme Court has today ruled that Employment Tribunal fees, introduced by the Government in 2013, are unlawful. From 2013 until today, employees 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 ones such as unpaid wages and breach of contract and 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, and did not qualify for a remission of the fees, then the law required the claim to be rejected.
There have long been concerns, raised by various employee groups and unions, about the impact of tribunal fees on the access to justice for employees. 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.
UNISON challenged the fees on the basis that, since the fees regime had been brought in, claims being brought before the Employment Tribunal had shown a near 70% reduction. Unison lost at the High Court and the Court of Appeal also dismissed the union’s claim.
The Supreme Court however found for Unison in its challenge. In particular, the Court was concerned at the 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 also was not convinced by the Government’s argument that the fees served as a sifting method for weeding out frivolous claims.
The Court found that the current fee structure indirectly discriminated against women because it cost £1200 to bring a discrimination claim and that women were shown to be statistically more likely to bring a discrimination claim. The Court stated that deterring people from bringing discrimination claims was discrimination in itself.
Following the 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 prohibit Employment Tribunal fees in principle, they merely ruled that the current levels were unlawful. 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 little or no financial claim, are not cost prohibitive for employees. The Government may also look to levy a charge on employers to defend claims to minimise the financial impact of this judgement.
As highlighted above, 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 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.
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.
If clients have any questions in relation to this judgement and how it might affect previous or ongoing employment tribunals, they should speak with their legal manager.