If you have been reading the news this week, you can’t have missed that one of the most important cases affecting employment law has finally been decided by the Supreme Court after many years of litigation. Employment Tribunal fees have been found to be unlawful and can no longer be charged. The case has enormous implications up and down the country and is definitely something all employers need to be aware of.
Tribunal fees were first introduced in July 2013, as we covered in our article here. Prior to that time, there had been no fees whatsoever for bringing an Employment Tribunal claim. Some people felt that this encouraged employees to bring claims where they had no merit, which was causing cost to the Tribunal system and therefore the taxpayer. While it is true that there were some vexatious claims being brought, in our experience it was a fairly small percentage of the total number of claims.
The fee system divided claims into two types. Type A claims were supposedly more straightforward, dealing with things like redundancy payments and unpaid wages. For those, the fees were £160 to issue the claim and £230 for the hearing. Most claims fell within Type B, which included unfair dismissal and discrimination claims. For those, the issue fee was £250 and the hearing fee £950. The Tribunal fees were significantly higher than for equivalent disputes in the small claims court.
The introduction of fees did more than just deter the nuisance claims – it reduced the overall number of claims dramatically, as shown in the BBC’s helpful infographic here. The figures strongly suggested that the fees were acting as a deterrent to those with legitimate grounds for claims, particularly for lower value claims.
UNISON therefore launched a judicial review to challenge the Government’s decision to introduce Employment Tribunal fees on the basis that it had been unlawful. The case worked its way through the courts, with the challenge being rejected in the High Court and the Court of Appeal before being heard by the Supreme Court.
The Supreme Court found that the fees were unlawful because they blocked access to justice, and because they disproportionately affected women, who were more likely to have discrimination claims (particularly in relation to pregnancy and equal pay). The Supreme Court is of course the highest court in the land, so there is no right of appeal against its decision.
Following the decision, the Government announced that Employment Tribunals would cease charging fees immediately, and we understand that has been implemented in practice – Tribunals have already stopped charging fees to people who issue claims in person, and although the online forms still do refer to fees, they will be updated as soon as possible. The Government also promised that steps would be taken to refund any Claimants who have paid fees in the period since July 2013. It is estimated that the total to be refunded is approximately £32million. However, the refunds will be far from straightforward – for example, there will be cases where the claim succeeded, in which case the Respondent would have been required to reimburse the Claimant’s fee. It is also not clear whether or not there may be grounds to extend Employment Tribunal time limits for those who were deterred from bringing a claim because of the fees.
The decision is not one which is likely to be welcomed by many employers. Some are now worried that the floodgates have been opened and we will see a huge increase in the number of claims, particularly spurious claims. I do think that claim numbers will inevitably increase significantly, and in the short term they are likely to spike while the subject of Tribunal fees is still in the news. As to spurious claims, there will always be some people trying to bring claims with no merit, but the fee regime had been a disproportionate means of trying to filter those out. I expect that as the claim numbers increase, if a greater number of nuisance claims result then different measures will be introduced to try and combat the problem.
If you do receive a Tribunal claim, then do get in touch. Our team has many years of experience of dealing with Tribunal matters all the way up to the Employment Appeal Tribunal, and we can help with advising on the merits of the claim, putting forward your best defence, representing you at hearings and (if you wish) the possibility of settlement.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team (01243 836840 or [email protected]).