You will have no doubt heard that the Supreme Court has unanimously ruled that Employment Tribunal fees are unlawful, following an ongoing legal battle with trade union UNISON.
It was held that the Fee Order of 2013, which introduced Employment Tribunal fees, was unlawful because it prevented access to justice for many people who could not afford the fee. So, what does this mean for you? First, a bit of background…
Prior to this Order coming into force, an employee wishing to pursue a claim against their employer was able to bring proceedings in an Employment Tribunal without payment of a fee, as well as appeal to the Employment Appeals Tribunal.
What’s the state of play, post 2013?
Currently, the fees implemented by the Employment Tribunal vary according to the nature of the claim, ranging from £390 to £1,200 for the more complex claims, fees which the claimant is responsible for. Despite fee remissions being available for some, it was said today this effectively prevented certain individuals from having access to justice.
There is no doubt that the Fee Order which was introduced in 2013 had an adverse effect on the number of employment claims being brought. Statistics from the Employment Tribunal reported a 70% drop in the amount of claims filed with the Tribunal since the introduction of the Order.
So what does the ruling really mean?
The Supreme Court found to that the fees acted as a deterrent for bringing claims that were for modest amounts or sought no monetary remedies which formed the majority of claims to the Tribunal, and that although the fees were recoverable from the employer if the claim was successful, this still amounted to a restriction of access to justice
All Tribunal fees paid between 2013 and August 2017 – estimated at £27 million – will have to be refunded by the Lord Chancellor’s department. Employers may therefore have to consider what types of claims they have had in the past and whether fees were reimbursed to a claimant as part of a settlement and accordingly, if they are subject to any mass scale refund of Tribunal fees.
Going forward it is likely a fee regime will be maintained, but with the implementation of significantly lower fees. It also may be the case that employers have to pay a fee when they issue a response to a Tribunal claim.
It has therefore never been so important to ensure that you have clear and up to date employment policies and procedures particularly when dealing with grievances and/or disciplinary issues in your business. This will help lower the risk of disgruntled employees ‘taking their chances’ in the Tribunal, as they now do not have the financial deterrent of fees with which to contend.
What should Employers do?
Stephen Elliott, Partner in our Employment team says:
“This morning’s Supreme Court decision, while clearly rooted in valid concerns about access to justice, does once again raise for employers the spectre of ex-employees being able to bring weak or spurious cases on the basis that, now there are no fees to pay, they have “nothing to lose”. For businesses who are already facing up to the serious challenges caused by Brexit and the resulting economic uncertainty, this additional risk is most unwelcome.”
Complications and challenges still remain, but it is vital that employers seek legal advice ideally at an early stage with any employment issue or indeed once tribunal proceedings are instigated.
On the 20th October, the Government announced its fees refund scheme, meaning the first people eligible for a refunds will now be able to apply.
The specialist employment team here at Endeavour can be contacted at any time and will assist your business to deal with any aspect of employment law and HR practice.