Supreme Court Rules 2013 Employment Tribunal Fees to be Unlawful
This morning (26th July 2017) the Supreme Court has ruled that employment tribunal fees, which were introduced by the government in 2013, are unlawful.
In a surprise ruling the Supreme Court overturned judgments by both the High Court (2013) and the Court of Appeal (2015) that went in favour of the government. Instead it unanimously allowed an appeal by trade union Unison which argued that the fees were unlawful.
When tribunal fees were introduced, a two tiered fee structure was implemented. Fees for more simple and straightforward claims, such as unlawful deduction of wage claims, were £160 and with a hearing fee of £230. For more complicated claims, such as unfair dismissal and discrimination claims, the issuing fee was £250 with a hearing fee of £950.
The impact of this was a significant reduction in claims. Whilst figures vary on the reduction (some claims reduced more than others, such as sex discrimination claims) the overall impact has seen employment tribunal claims across the board drop by between 70% and 80% since 2013.
The Supreme Court has made it clear that the government will need to refund all employees who paid employment tribunal fees since their introduction in 2013. Estimates of the total refund costs range from £27 million to £34 million.
Moving forward, whilst the judgment was only released this morning, it appears that employment tribunal fees will be scrapped immediately. Justice Minister, Dominic Raab has publicly stated that the government will comply with the ruling and made the following statement:
“The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case. We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid. We will also further consider the detail of the judgment”
At present it is not clear how the necessary logistics in scrapping the employment tribunal fees will work in practice and therefore frankly, it will be a case of watch this space. GA Solicitors will monitor the situation closely and will release further information as and when the impact of the Supreme Court’s decision takes further shape.
However, what is clear from the decision is that it is very likely the number of employment claims will once again increase. Employers must be aware of the increased likelihood that they may be subject to employment tribunal claims from both existing and former employees.
Our advice to all employers is to make sure that they have clear and robust disciplinary rules and grievance procedures which are strictly adhered. We would also advise employers to consider taking legal advice before taking disciplinary action, dismissing employees or dealing with complicated grievances or complaints from members of staff.
With the right advice early on, a lot of stress, time and money could be saved.
You can view the judgment here – https://www.supremecourt.uk/cases/docs/uksc-2015-0233-judgment.pdf
Rob Zacal, employment solicitor