Tribunal Fee Regime to be abolished

Is this the end of Tribunal Fees?

In a landmark decision early today (26th July ’17) the Supreme Court decided that the Employment Tribunal fee regime introduced in 2013 is unlawful.

This marks the end of Unison’s four year battle to overturn the regime introduced by the Conservative Government back in the days when it had a strong majority in the House of Commons.

The judgment is striking, not only because of its far reaching effects, but also in its conclusions:

  • the fees regime was ‘ultra vires’ (i.e. beyond the Government’s legal power) because the 2013 Order effectively prevented access to rights contained in employment legislation
  • it was also unlawful under European Law because it introduced unjustified limitations on workers’ rights under EU law
  • the higher fees for ‘type B claims’ (which include discrimination) were indirectly discriminatory against women

It is hard to imagine a more comprehensive routing of the fee regime! Furthermore, the decision means fees already paid (reported to be as much as £27 million) will have to be re-paid to claimants.

This decision has immediate effect, so huge efforts are going to be required to amend the applicable rules, systems and guidance. There are also serious questions about whether claims that were discouraged by the regime can now be taken.

Employment Tribunal claims were once the bane of employers’ lives, but after the introduction of fees the numbers of claims fell off a cliff with a reduction of 70%. It is of course too early to predict what will happen to claims in the future, but all indicators are that employers will face significantly more claims.

Quite what the Government’s response will be remains to be seen; they may introduce a new fee regime with significantly lower fees, or simply revert to free access.

How bad will this be for employers?

In our view it should not be a problem for employers who understand employment rights and operate policies and practices that underpin fair and equal treatment. However, it is bound to cause disruption, pain and cost for those who don’t understand or follow employment laws.

Employment Tribunal Fees – UNISON challenge fails

From July 2013 individuals who wish to take Employment Tribunal claims have had to pay a fee. The fees ranged from £160 for a simple claim (such as a wages claim) to £250 for a more complex claim (like unfair dismissal). Any claim which is not accompanied by the appropriate fee must be rejected by the Tribunal (See Rule 11).

A further fee of between £230 to £950 is also payable if the case progresses to a hearing. There are some provisions for the remission or part-remission of fees which depend on status and income.

The introduction of the fee system produced a spike in Tribunal claims (as those with pre-July 2013 complaints scrambled to get them into the system before fees were introduced) and then – predictably – a considerable drop off of cases submitted (reportedly more than one half less).

Fewer Tribunal claims means less access to justice, not only for those who claim unrealistically or in bad faith, but also for those with genuine complaints. It is good for employers, but bad for those who have genuinely been wronged and cannot afford the cost of enforcing their rights.

EU law prohibits national courts from making it impossible or excessively difficult for individuals to gain access to rights conferred by EU Law (which many employment related rights are). So the UK’s largest Union, UNISON, took a legal challenge to the introduction of fees on this basis and three others (including arguments that the fee regime will indirectly discriminate against those within protected classes).

The High Court has today issued its Judgment refusing UNISON’s challenge to the lawfulness of the fee regime. We understand that UNISON intend to appeal this decision to the Court of Appeal.

For now at least, and no doubt to the relief of many employers, the Fee regime is here to stay.