The end of tribunal fees… for now.

On 26th July, Unison was finally successful in their case against the government.  The Supreme Court made a ruling that employment tribunal fees were unlawful.

Tribunal fees were introduced in July 2013 and an employee who wanted to claim unfair dismissal or discrimination had had to pay £250 to submit a claim and a further £950 as a hearing fee (fees were lower (£160 plus £230 hearing fee) for less substantial claims, such as unpaid wages).  If the employee was successful at the employment tribunal hearing then the employer would normally be ordered to repay these fees to the employee, as well as any compensation award.  After the introduction of the fees, tribunal claims dropped by over 70%.

Unison successfully argued that the fees were unlawful, indirectly discriminatory against women, and a barrier to justice.

So what happens now?

With immediate effect, employees will no longer have to pay fees if they want to submit an employment tribunal claim.  In addition, the government has to reimburse everyone who previously paid fees – no easy task!  This could be especially difficult if the employee was successful, so their employer ended up paying back the fee.

There is also a possibility that out of time claims may be accepted if an employee can show that he or she did not submit a claim previously because of the fee.  However, this has yet to be tested to see if the argument will be accepted by the tribunals.

Whatever happens, it is predicted that the number of claims will rise, putting pressure on an already stretched system.

What does it mean for employers?

Essentially the financial barrier has been removed for employees wishing to make tribunal claims, so this may encourage some disgruntled employees to submit claims when legally they have little prospect of success.  However, the tribunals have processes in place to weed out these sorts of claims before they get to a hearing (although the employer will usually be involved in this process). It does mean that those with genuine cases will be able to submit a claim more easily.

Therefore, employers should ensure that they follow their procedures and treat employees in accordance with the law.  Fair and reasonable employers need have nothing to fear!

It could see the rise in settlement agreements, whereby, in return for a financial sum, an employee signs an agreement waiving their right to go to an employment tribunal.  This gives employers finality (they know they can’t be taken to a tribunal) but at a cost.

So is this the end of fees forever?

Not necessarily.  Fees were introduced to discourage vexatious claims, but also to cover the costs of the tribunal system.  There is nothing stopping the government from introducing another fee system.  This could be done, for example, by reducing the level of fees, putting more of the cost on employers or introducing ‘losing party pays’ (as is the case in other courts).  In addition the government may try to encourage further use of alternative dispute resolution (such as ACAS conciliation or mediation),

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