End of Tribunal Fees?
A Supreme Court ruling on fees for Employment Tribunals has overturned a four-year system. Employment Law specialist Sara Morgan looks at the implications.
July 26 this year was a momentous day and not just for employment lawyers. It was the day the Supreme Court gave its judgment in the long-running challenge to employment tribunal fees brought by Unison.
By way of background, fees for bringing employment claims were introduced in July 2013. Until that time no fee whatever was payable – afterwards fees, all payable by the employee making the claim, could be as high as £1,200.
The introduction of fees led to an immediate reduction in the number of claims by on average 70 per cent and that has continued to be the case in subsequent years. All types of claims decreased but employees who were trying to claim small sums were particularly hard hit – having to invest fees of £390 to claim perhaps £500 was just not viable.
Unison commenced its application for judicial review of the fee regime in 2013 even before the introduction date but it has taken four years for the case to come to a conclusion. Whilst the litigation was long and complex, the ultimate decision of the Supreme Court was based on the key issue of access to justice.
In its unanimous decision the Court’s decision was that the Order introducing tribunal fees prevented access to justice, that Order was therefore unlawful from the outset and in legal terminology was quashed – in other words the position is as though the Order had never been made.
This is such an important decision because of what the Court had to say about justice and which applies far more widely than to just employment cases. The judgement is wide ranging but in essence what is said is that the whole point of court system is to provide the means by which our laws are applied and enforced. This is only possible if individuals have proper access to the courts – cases are not just about the parties involved – often decisions clarify the law and make changes that affect many others.
It is not possible in an article of this length to go into all the reasoning of this landmark decision but it is undoubtedly a shot, or perhaps more accurately a ballistic missile, across the bows of Government not to restrict access to the courts for ordinary citizens.
So what happens next?
First all the fees that have been paid since 2013 will need to be refunded. This is a mammoth task – it is estimated there is £32 million which has to be paid back. Of course many people will have moved in the interim and that is far from the end of the story. In some cases tribunals ordered the employer to pay the successful employee their fees as part of the compensation and cost awarded. In those cases who receives the refund? Even more complex, what about cases that were settled before a full hearing where the employer agreed to pay the fee as part of the settlement?
No fees are now payable but will the Government try to bring in an amended scheme? Perhaps lower fees and the necessity for both the employer and employee to make payments? The Supreme Court was not saying that there should be no fees but rather that these must not be at a level which impedes access to the courts. We will have to wait and see but with the Brexit negotiations ongoing this will probably not be a priority any time soon.
Another vexed question is what is the position of employees who did not bring claims over the years because they were deterred from doing due to fees? On the face of it their claims are out of time but will tribunals allow cases to go ahead? There will undoubtedly be some test cases so watch this space.
Will more claims now be made? Probably yes but it is unlikely they will return to their pre July 2013 level. This is partly because in the meantime the ACAS early conciliation scheme has come into play which results in a significant number of settlements prior to claims being lodged and in other cases employees realising their potential claims are ill-founded. However, employers should take on board that employees are now likely to be much more inclined to make claims even in relation to low value issues. Whilst the fee regime was in force some employers were inclined to take an over-robust approach to decision making in the knowledge that a claim was unlikely – that has now changed so it is imperative that employers now ensure they comply with employment legislation and take early advice if they are in any doubt as to the appropriate course.