Employment Tribunal Fees – Breaking News

John Grant

Published by
John Grant

26th July 2017

In significant news for all Employers, the Supreme Court has today (26 July 2017) upheld an appeal by Unison the Public Sector Union in relation to the requirement to pay fees in the Employment Tribunal.  This is a very important decision that is likely to have wide-ranging consequences.  

Background

The Government changed the rules for Employment Tribunals in 2013, making it necessary for fees to be paid to the Tribunal whenever a claim was brought.  The problem this was designed to address was that there had been an increase in the number of spurious claims that were being brought in the expectation that the cost for the employer in resisting them would be disproportionate and that settlement proposals would therefore be made even though the claims had little chance of success.  

While the thinking behind the rule change made sense against that background, it ended up having a hugely significant effect on the number of claims brought.  There was a reduction of almost 80% in claims to the Employment Tribunal and it is highly likely that, as a result of the rule change, there would have been a number of legitimate claims that were not brought only because of the requirement to pay fees.  

The Decision and outcomes

The Supreme Court has now accepted the argument put forward by Unison that the rule change limited access to justice and that this cannot be correct.  In the leading Judgment, Lord Reed held that:- 

“In order for the fees to be lawful, they have to be set at a level that everyone can afford, taking into account the availability of full or partial remission.  The evidence now before the Court, considered realistically and as a whole, leads to the conclusion that that requirement is not met.” 

Not only does this represent a reversal of the current position in relation to Claimants going forward, but also there is the question of what will happen to the £32million of fees that have been paid to the Tribunal since the rule change was introduced.  The Ministry of Justice has indicated that they are going to take immediate steps to stop charging fees and will refund sums that have already been paid. 

However, one complicating factor is that previously successful Claimants may have had their fees paid by their former Employers.  At the very least, there will be a lengthy administrative exercise to be carried out. 

There may also be creative arguments brought that potential Claimants did not even bring a claim on the basis that they were put off by fees and that they should now be given the opportunity of bringing claims despite the fact that they would normally be time-barred.  

In a separate aspect of the decision, it was also held that the requirement to pay higher fees, of up to £1,200, for discrimination cases, did itself constitute indirect discrimination because, statistically, a higher number of woman would have brought such claims.  

What does the decision mean for employers?

One outcome of this decision is that employees are now going to be more likely to take their chances of bringing Tribunal claims if dissatisfied with how their employer has handled matters, because they know that they will no longer have to pay significant fees to do so.  

This emphasises the need for all employers to have in place adequate policies and procedures for disciplinary and grievance matters, and to take advice about situations which, if handled wrongly, might end up leading to a Tribunal claim being brought.  A small amount spent on legal expenses to head off the possibility of a claim is a much better investment than having to resist a claim once it is brought to a Tribunal.  

Next steps

If you wish to discuss any aspect of the above further then please do not hesitate to contact John Grant (jzg@wjm.co.uk) or any of our experienced Employment team.