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Employment Tribunal fees legislation prevents access to justice

The morning of 26 July 2017 brought with it the surprising news of the Supreme Court judgment that the Employment Tribunals and Employment Appeals Tribunals Fees Order 2013 has prevented access to justice, is unlawful and will be quashed.

In 2013 the Employment Tribunals and Employment Appeals Tribunals Fees Order 2013 ordered that a fee had to be paid to bring a claim in the Employment Tribunal; these fees were £160 to bring a level 1 claim (for simpler claims such as holiday pay, redundancy payments and unlawful deduction from wages) and £250 for a level 2 (for more complex claims such as discrimination, unfair dismissal and equal pay) claim.  The hearing fee for a level 1 claim was £230 and £950 for a level 2 claim.  For Employment Appeal Tribunal (EAT) cases, the issue fee was £400 and the hearing fee was £1,200.

Perhaps unsurprisingly, an almost immediate 70% drop in Employment Tribunal claims was reported and this reduction has been palpable for many businesses.

The Trade Union UNISON challenged the legality of the Employment Tribunals and Employment Appeals Tribunals Fees Order 2013, stating that the level of fees in the Employment Tribunal compared to those in the Small Claims Court to bring claims for small sums of money prevented access to justice for employees.  Furthermore, it was argued that the two-tier system of fees was discriminatory by making it more expensive for those claiming discrimination to bring a claim.

The arguments finally reached the Supreme Court, which adjudged the Employment Tribunals and Employment Appeals Tribunals Fees Order 2013 prevented access to justice and was unlawful and also that it is indirectly discriminatory on the basis that it costs more to bring more complex claims to the Employment Tribunal.

The Employment Tribunals and Employment Appeals Tribunals Fees Order 2013 will now be quashed with immediate effect and there are already reports that those Employment Tribunals which accept hard copy claims are no longer taking a fee to lodge those claims.  The online claim issuing procedure will no doubt be amended as soon as it is logistically possible.

Furthermore, the Supreme Court ordered that those fees already paid by Claimants shall be refunded.  This could mean an overall reimbursement in the region of £32million from the Lord Chancellor’s department.  In practical terms, this will be no easy task as it could require a manual review of all claims issued over the past four years.

There is now a legal question regarding those who did not bring a claim because it was cost-prohibitive.  Will Tribunals consider that these individuals should have the usual three-month time limit (excluding the ACAS conciliation period) to bring a claim extended in the circumstances? This all remains to be seen and there will no doubt be a flurry of new – and potentially old – claims.

Finally, there is a view that this is unlikely to mean the end of Employment Tribunal fees and there is likely to be a consultation soon on a new fee regime which is lower and may even include a transfer of the fee burden from the employee upon issuing the claim to the employer upon defending the claim.

We will update you on any developments in due course but please contact a member of our employment team on 01254 828300 if you would like further information or have any queries.

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