Tribunal Fees are unlawful!

In 2013 the UK government introduced tribunal fees, triggering a 70% reduction in applications to the employment tribunal by employees. This decision was strongly opposed by UNISON. On 26th July 2017 the Supreme Court allowed the UNISON appeal and announced that the imposition of tribunal fees was unlawful!

So what does this mean for employers?

Employers will be at increased risk (again) of Tribunal claims and may well have to give more serious thought to settling with disgruntled employees at the time of termination of employment, or be more realistic in their discussions in early conciliation with ACAS.

Today, seven Supreme Court Justices held that the Fees Order does effectively prevent access to justice and that the Fees Order imposed unjustified limitations on the ability to enforce EU rights, this means that the rules governing Tribunal applications will need to be rewritten and we will have to wait and see what the current process will be replaced with. The anticipated government consultation will determine the new process but it seems unlikely that tribunal fees will be abolished entirely, they may simply shift all or some of the burden of costs to the employer.

Astonishingly, today’s judgment made it clear that all fees paid between 2013 and now will have to be refunded by the Lord Chancellor’s Department.

With immediate effect the Employment Tribunal Service will have to remove the obligation to pay fees prior to the claim being accepted by the Tribunal.

Many employees chose not to make a claim because of the fee structure introduced in 2013, so it is possible that some employees may now wish to make an application to present a case out of time, on the basis that it was not “reasonably practicable” to bring the claim within the original time frame.

Anyone who has paid a Tribunal fee, who was unsuccessful or who withdrew or settled prior to the Tribunal hearing, will be able to make a claim for a refund of the fee they have paid, this is likely to be a long, slow and complicated process.

There is no guidance at this time to offer to employers who settled via ACAS early conciliation to avoid a tribunal claim. Employees settling via early conciliation would not have incurred a fee as no application to the tribunal was made, but the situation announced today is unprecedented which means we will have to wait for legal guidance before we can know if we should be concerned about employees with previously settled claims being allowed to make a post settlement tribunal application on the grounds that it was previously cost prohibitive.

If you would like to discuss the changes announced today in more detail, please do not hesitate to contact me