The Employment Tribunal fees system, in place since 2013, has been abolished with immediate effect.
The Government took this drastic measure as a result of the Supreme Court’s ruling that the system was unlawful, meaning that claimants may now, once again, take their employer to Tribunal for free.
Tribunal Fees Introduced In 2013
Pre-2013, claimants did not have to pay to use the Employment Tribunal system. There were two main reasons for the Government’s decision to introduce fees: weeding out weak claims which were a burden on the administration; and ensuring that the party causing the system to be used was the one who would foot the bill instead of the tax payer. To make sure this happened, losing employers would be made to reimburse the claimant for the fee they had paid at the start.
Two levels of fee were implemented: £390 for Type A claims such as unlawful deductions from wages; and £1200 for unfair dismissal and discrimination claims etc.
Although the introduction was accompanied by a ‘remission’ scheme (later renamed ‘Help With Fees’) which saw fees waived for those who, after being means tested, were declared as unable to pay, the number of claims made to Employment Tribunal dropped by 79%.
UNISON Legal Challenge
Immediately upon introduction, UNISON began its legal challenge against the Government’s decision to charge tribunal fees. Within three months, the High Court heard UNISON’s argument that fees are unlawful because they stopped people getting the justice they deserved and were discriminatory. The challenge failed due to lack of evidence.
UNISON continued the fight, again suffering defeat for a second time at the High Court, and subsequently at the Court of Appeal.
Claim Reaches Supreme Court
The Supreme Court, however, broke new ground this week in its ruling that tribunal fees are unlawful. It said:
- Fees breach common law because they block access to justice;
- They discriminate against groups of people with a protected characteristic. One example used was that women are disproportionately disadvantaged by fees because they, on average, do not earn as much as men;
- They breach EU laws.
What This Means
Once the ruling was announced, the Government immediately removed the requirement to pay a tribunal fee to use the Employment Tribunal system. Therefore, as of 26th July 2017, Employment Tribunal claims are free. Employers should now:
- Assess how robust their workplace practices are and close any gaps which have been internally challenged or could be open to challenge. Employees now face no financial barrier to enter the ET system and, because of this, employers should expect claim numbers to rise;
- Assess the risk of any dismissals or other action taken against employees within the last 3 months because this is the time limit for making a claim. Unsatisfyingly for employers, this is not a finite cut off point because employees may argue the limit should be extended for them.
The Government also confirmed they would refund all fees paid since implementation. Where employers have reimbursed a claimant who won their claim, it may well be the employer who receives this refund. Details on the refunds are not yet available.