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Employment Tribunal Fees Abolished

On 26 July 2017, the Supreme Court ruled in a case brought by UNISON that Employment Tribunal Fees were unlawful since their introduction on 29 July 2013 and that the Fees Order which brought them into effect must be quashed. Claimants will once again be able to bring claims in the Employment Tribunals, without having to pay any Tribunal fees.

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Why did the Government introduce Tribunal fees in the first place?

The Government’s intention in introducing Tribunal fees was threefold – to transfer the cost burden of the Tribunal system from the taxpayer to those who used it, to encourage earlier out-of-court settlements and to discourage Claimants from bringing hopeless claims or claims that were simply designed to cause trouble for the employer. The Supreme Court held that whilst these were legitimate aims, the Fees Order would be unlawful if it prevented access to justice, which it would do if Tribunal Fees were not set at a level that everyone could afford.

Why have Tribunal fees been abolished?

The Tribunal fee for bringing an unfair dismissal or discrimination claim was set at £250 and the Claimant had to pay a further hearing fee of £950 if the case proceeded to trial. The Supreme Court referred to evidence on the impact of the introduction of fees – Employment Tribunal claims had fallen by 66 to 70% - a “dramatic and persistent fall”. The Supreme Court concluded that “a significant number of people who would otherwise have brought claims had found the fees to be unaffordable”. A Government Report published in January 2017 had estimated that around 10% of potential Claimants had decided not to bring a claim because they could not afford the Tribunal fees (in the case of many of them, having just lost their job), but acknowledged that this was likely to be an underestimate.

What does this mean for employees (Claimants)?

  • As of 26 July 2017, Claimants can once again bring a Tribunal claim without having to pay any Tribunal fees. 

  • Claimants who have already paid fees will be able to seek reimbursement of what they have paid from the Government. It is not yet clear how this will work in practice and a further announcement is expected from the Government in September 2017.

  • It is likely that Claimants whose claims were rejected or dismissed by the Tribunal in that period for non-payment of fees will be able to have their claims re-instated. Further guidance is awaited.

  • It is not yet clear whether or not Claimants who were dissuaded from bringing their claims at all because of the Tribunal fees will now be able to bring their claims out-of-time. The guidance from the Tribunals suggests that there will not be any special system put in place for dealing with any such claims: such Claimants will need to bring their claims in the usual way and request an extension of time based on the usual tests – that it was “not reasonably practicable” to bring their claim in time (for unfair dismissal claims) or that it is “just and equitable” to extend time (in discrimination claims). If Claimants want to do this, they are advised to do so promptly.

What does this mean for employers (Respondents)?

  • Respondents who have been ordered by the Tribunal at the end of a case to reimburse the Claimant their Tribunal fees may also try to seek reimbursement from the Government. Again, it is not yet clear how this will work in practice and a further announcement is expected in September 2017.

  • Employers are expected to face significantly more claims than they would have done had Tribunal fees not been abolished. However, it is perhaps unlikely that the number of Tribunal claims will return to what it once was, because two other measures that where introduced, at least in part, to limit the number of claims remain in place: employees still need two years’ service to bring an unfair dismissal claim (the change from one year’s service having been made in April 2012, a year before the introduction of Tribunal fees), and an individual must trigger ACAS Early Conciliation before bringing a claim (a requirement introduced in April 2014, a year after Tribunal fees).

What does this mean for the Government?

  • UNISON estimates that the Government will need to reimburse around £27 million in Tribunal Fees that have been paid by Claimants since 2013. The Government has issued a statement saying that they are currently working on the arrangements for a refund scheme and they hope to be able to announce further details in September 2017.

  • It is expected that there may be a surge in new claims and applications by Claimants to submit out-of-time claims and re-instate claims that were rejected for non-payment of fees. There is some concern that because the number of Employment Judges and staffing levels were reduced when the volume of claims fell, the Tribunals might struggle to cope with demand (at least in the short-term), causing delays in the Tribunal system.

 

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