Supreme Court rules employment tribunal fees as unlawful
In July 2013 fees were introduced in both the employment tribunals and the employment appeal tribunal. This has meant that a claimant has needed to pay both issue and hearing fees if they wanted their case heard in the Employment Tribunal. A single claim could cost a claimant up to £1,200.
The public sector union, UNISON, and the Scottish law firm, Fox and Partners, both applied for a judicial review of the introduction of fees. It was argued that the fees placed unfair and potentially disproportionate financial burdens on employees wishing to bring:
- equal pay;
- unfair dismissal;
- unlawful deductions from wages; and
- holiday pay claims.
The first two applications brought by UNISON were dismissed by the High Court as it was considered there was lack of evidence. The Court of Appeal then rejected UNISON’s appeal against both High Court decisions, but on 26 February 2016, UNISON was granted permission to appeal to the Supreme Court.
In the meantime, the Government had given a Great Britain-wide undertaking that if the fees regime is found to be unlawful, all fees will be repaid with interest. It would now appear that the Government will need to make good on that undertaking and pay back an estimated £32m owed to claimants for the fees that have contributed to an estimated 79% reduction in claims (as reported by the BBC today).
Whilst the present system of fees has been struck down it might not be the death of the fee system in its entirety.
The Government may abandon fees altogether i.e. a return to the pre-2013 system. It may however try to bring in a lower fees system instead particularly because the Supreme Court noted a contrast between the level of fees in the tribunal, and the small claims court where it is very much cheaper to bring a claim for a small sum of money.
Fees have not been the only cause of a reduction in claims. An increase in qualifying service for normal unfair dismissal from one to two years and ACAS Early Conciliation requirements have also contributed. However the fees system has been a major factor in the reduction of claims.
Ultimately a no fees system or a reduced fees system is likely to lead to a material increase in tribunal claims. In turn this makes it more important that you ensure that your employment practices and procedures are legally compliant.
Contact our employment team for information and advice on any employment law related matters.