Employment Tribunal Fees Ruled Unlawful

Employment Tribunal Fees Ruled Unlawful
August 1, 2017 Katie Baker-Clifton

In recent days one of the most important legal decisions of our generation was made. The Supreme Court handed down its judgement in the case of R (on the application of UNISON) ‑v- Lord Chancellor regarding fees imposed for lodging an Employment Tribunal claim.

The Employment Tribunal system was established in 1960’s. Its aim was summarised as “employment tribunals are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs, and those who are vulnerable to long-term unemployment. They are designed to deal with issues which are often of modest financial value, or of no financial value at all, but are nonetheless of social importance.” Unlike the Civil courts and until 2013, there was no fee charged for claimants wishing to assert their rights by submitting a claim.

On 29th July 2013 that changed and upon an application being made to the Employment Tribunal, a claimant would have to pay either £160 or £250 to issue their claim. A further £230 or £950 would then have to be paid in order to secure the hearing at a later date. Whilst it must be acknowledged that a fee remission system was made available to ensure that those without the means to pay would not have to or would have their fee reduced accordingly, for others, it was a large sum of money, especially if the employment relationship had recently terminated and the claimant was now without income.

The practical effect
As a result there was a significant reduction in the number of instructions from employees wishing to assert their rights. In all, the employment tribunal system saw a 79% reduction in the total number of claims brought.  This eased pressure on the Employment Tribunal system and fewer companies were forced to defend or indeed settle employment claims. Some people held the view that it prevented bogus claims from being issued. However, statistics actually suggested the opposite. Prior to Employment Tribunal fees being implemented, 13 to 14% of claimants were successful in their claims. Following the introduction of the fee system, only 4% were successful (however, these figures are based on claims where a judgement were issued and does not account for the significant number of cases that settled).

The legal argument
UNISON argued that introducing the employment tribunal fees was unlawful and prevented access to justice and that it was also discriminatory.

The decision
It was emphasised that Employment Tribunal cases are important for society as a whole, not just the individuals bringing that claim.

Lady Hale delivered her own judgement focusing on the discrimination arguments (it is accepted that more women are likely to victims of discrimination than men and the higher fees were charged for bringing discrimination claims) and stated that the charging of fees for complaints had clearly “deterred meritorious claims at least as much as, if not more than, non-meritorious claims”. It was discriminatory to determine complaints in that way.

Next steps
Now that the fees have been ruled to be unlawful, the government will likely now react in order to put in place an alternative system.  It is unlikely that the government will want to reverse the significant reduction in the number of claims.

Since the decision, the Employment Tribunals were refusing to take fee payments when hard copies of the claim form were presented in person. When submitting a claim online, the website will be amended so that payment is not taken.

The government will now have (and have voluntarily offered) to reimburse the approximate £32 million worth fees generated by the system since July 2013, but this will not be simple. For those claimants who were successful in their claim, it is likely that an order was made for the Respondent to reimburse those fees and also, due to the significantly low number of claims that actually reach trial, there will have been many cases that settled via a confidential agreement where parties have reached an agreement in relation to those fees.

Food for thought
We may never know how many people missed out on their opportunity to assert their legal rights because they couldn’t afford the expense of the fees.

If you feel that you have been unfairly treated at work or you are company facing a claim from an employee or who wants to be proactive in avoiding workplace disputes, please contact our employment law specialists.