4 August 2017 by

Employment Tribunal is now free to use and you may be entitled to a rebate

Last week’s shockwave ruling by the Supreme Court means that:

  • It is now free for employees to bring a claim to the Employment Tribunal – prior to last week it could have cost up to £1200
  • Any fees paid to bring a claim since 29 July 2013 (totalling £27million) will now be refunded
  • There will be an increase in claims
The situation before last week

From July 2013 the cost burden of an employee from bringing a claim to the Employment Tribunal was transferred to the users of the Employment Tribunals i.e. the Claimants/ Employees. Previously it was free for the user as the costs were funded by the taxpayer out of general taxation. The Government’s aim was to deter unmeritorious claims and encourage early settlement.

The fees could be as much as £1200 and while in theory there were circumstances in which the fee could be waived these were so restrictive that they were rarely applicable.  As many expected the introduction of fees saw a dramatic and persistent fall in the number of claims brought in the Employment Tribunals from 66 – 70%, and the fees payable by claimants significantly influenced the decision on whether to issue a claim or not.

Why is it now free again?

The trade union UNISON appealed the lawfulness of the fees regime to the Supreme Court arguing that the fees were not fair and discriminatory to women.

In its decision given on 26 July 2017, the Supreme Court decided the fees were not lawful because in practice for many they were too high, so much so that they prevented even people who could afford them from pursuing claims for small amounts and non-monetary claims. These limitations contravened EU rights as they were disproportionate and unlawful.

It was also decided that the fee system was discriminatory against women. Evidence showed that more women than men were likely to bring claims for discrimination because of sex or maternity and/or pregnancy. UNISON suggested that 54% of these types of claimants were women. These claims attracted a higher fee and the court agreed that this would put women at a particular disadvantage when compared with men. The Supreme Court concluded that charging higher fees was not justified and was not a proportionate means to achieving the aims of the fees regime.

What now?

The immediate impact of the decision is that the Employment Tribunal has announced that it has “immediately taken steps to stop charging fees for proceedings in the Employment Tribunals and the Employment Appeal Tribunal.” The digital service where Claimants can issue claims is currently suspended for an interim period. 

The fees regime is now scrapped and will not be payable on any claims. For now, the government’s focus will be on:

  • introducing a new system taking into account the comments of the Supreme Court. This could mean that we see fees linked to the value of compensation (rather than the type of claim) and/or a fee payable by employers when a response is filed with the Employment Tribunal to shift the burden from the Claimants and the taxpayer.
  • updating its digital services (currently updated to confirm no fees are payable)
  • setting about the huge task of refunding £27 million of fees paid since 29 July 2013

Whilst we know that there is likely to be an increase in new claims, we expect that the Employment Tribunals will have to deal with novel arguments and consider whether historic “out of time claims” can be heard now in the Employment Tribunal. We foresee claims being brought asking for extensions of time limits on the basis that access to justice had been denied, as a result of the fees regime.  If successful, employers could have to defend claims going back over 4 years. Claims and defences of this nature will be problematic for all parties involved.

If you would like to discuss the impact of the Supreme Court’s decision to quash the Employment Tribunal fees regime for you or your business or have any other employment law issue, please contact one of our solicitors in the Employment team here.

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