Have the Employment Tribunal floodgates been opened?August 03, 2017
It’s a question many businesses and employer organisations are asking themselves, following last week’s Supreme Court decision that charging fees for Employment Tribunal claims is unlawful. It was perhaps the most significant and unexpected decision in Employment law for quite some time.
To recap: from July 2013, for the first time ever, individuals had to pay a fee to issue a claim and a second fee to proceed to a final hearing. The overall cost for an individual claimant depended on the type of claim being brought. It was £390 for smaller, less complex claims, e.g. unpaid wages claims and £1,200 for more complex claims e.g. unfair dismissal, discrimination and equal pay claims. Since their introduction around £32million has been paid in Tribunal fees.
The Supreme Court unanimously ruled the fees unjustifiably interfered with an individual’s right of access to justice. It went on to find the system unlawfully discriminated against women and other protected groups.
It relied, in part on the significant drop in number of Tribunal claims since fees were introduced, namely a ‘long term’ reduction of 66 -70%. Further, a remission system (to assist those without the capital to pay the full fees) was flawed, and in reality did not assist the people who needed it the most. Feedback from people who had contacted ACAS to start the mandatory Early Conciliation process for most claims, also indicated fees were a major reason why they did not go on to issue a claim.
What does the Supreme Court’s decision mean?
The ruling quashed the Tribunal’s Fees Order, which means the Employment Tribunal is no longer allowed to charge any fees. An individual can now issue a claim and pursue it all the way to a final hearing, without any Tribunal fees.
The decision doesn’t mean that any kind of future fees system would also be unlawful. The Supreme Court said “fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice. Measures that deter the bringing of frivolous and vexatious cases can also increase the efficiency of the justice system and overall access to justice”.
The Government may be inclined to go away and think up another (fairer) system for charging fees. However, the decision is scathing of the system that’s just been abolished, and it’s likely to take the powers that be some time to come up with an alternative system that isn’t open to challenge.
What’s the immediate impact of the decision?
Firstly, the Government has undertaken to repay all fees paid by individuals and employers (where the Tribunal ordered the reimbursement of fees as part of someone’s compensation). This in itself is going to be a huge task for the Tribunals. We await the detail of how the refunds are going to be made.
The Tribunal’s online system for issuing claims has been suspended so it can be updated to remove the requirement for a fee to be paid.
Many commentators, including ourselves, foresee an increase in the number of claims being issued. It will take time, but there is no evidence to suggest they won’t return to the pre-2013 levels, i.e. there could be an increase of up to 70%.
Less likely, but still a possibility, is that we may see claims which on the face of it are out of time now being issued. Individuals may ask the Tribunal to exercise its discretion to extend time on the basis that it was not reasonably practicable for them to issue their claims earlier and/or it would be just and equitable to extend time. We shall have to wait and see whether such arguments are successful.
But what does this mean for employers?
This case has sent shockwaves around Government, the legal community and amongst businesses (both big and small). It has received, and will continue to receive, a huge amount of publicity. There is no longer a financial barrier preventing people from issuing a claim, and your staff will know this.
- Check your Employment policies and procedures are up to date and ensure you and your managers know how to implement them. We offer a free review of staff contracts and policies, as well as in-house training for managers.
- Take advice if you are going through a grievance or disciplinary situation. Getting it wrong just got significantly riskier for employers.
- If you receive notification of a claim and believe it is spurious, we can help. There are provisions in the Tribunal’s rules for weeding out vexatious claims: we can explain and help you use them where appropriate.
How we can help
We also have an Absolute Employment Protection Service, which provides employers with a helpline for expert employment law and HR advice from as little as £100 plus VAT per month. In addition, your business will also benefit from insurance to cover the cost of defending claims, payment of Tribunal and settlement awards, and defending criminal and Health & Safety Executive prosecutions.
Find out more about our Absolute Employment Protection Service.