What the end of employment tribunal fees means for you

What the end of employment tribunal fees means for you

This has been a seismic few days in the world of employment law and employment lawyers with the Supreme Court declaring Employment Tribunal fees to be unlawful.

To recap...

Employment Tribunals have existed since the 1970s and they were originally called Industrial Tribunals, a term you often still hear used.

From the outset they were free to access, but in July 2013 the then government introduced fees for anybody who wanted to use the Employment Tribunal system.

There was a fee at the outset which could be £160 or £250 depending on what sort of claim you were bringing.

You had to pay this Issue Fee just to start your claim. Then when you got within one month of the hearing you had to pay a Hearing Fee of either £230 or even £950.

For a standard sort of unfair dismissal or discrimination claim the changes meant you were paying £1200 to have your case decided by an Employment Tribunal.

There was a remission system which meant people with no or very little income didn’t have to pay, which the government claimed would stop there being any issue with access to justice.

But the stark statistics from the very first days of the fee system were remarkable. 

The numbers don't lie

Tribunal claims dropped by somewhere between 70% and 80% and stayed there.

It was clear from the very outset that many people were being prevented from bringing claims that they would otherwise have brought.

Supporters of the fee system claimed that it would eradicate vexatious or malicious claims which were damaging for employers.

The reality is that those sorts of claims probably only ever represented about 1% or 2% of Tribunal claims, and fees will have done nothing to put those people off anyway. 

Which reminds me.

The worst serial claimant I ever had

Bright enough to have represented himself before the Court of Appeal, and savvy enough to ensure he only ever had assets of 82p. So cost orders never concerned him.

If he is still out there, I’m sure the fee system hasn’t been putting him off for the last four years.

In any case, the Supreme Court has made it very clear that fees are now illegal.

So tribunal fees are history. What now?

Firstly, every fee that has been paid in the last four years can be recovered, and we are told the Employment Tribunals will put some sort of refund system in place.

If you were a claimant who paid a fee, you can get it back whether you won or lost.

Of course there will be situations where the claimant paid a fee but have already in effect had it reimbursed of them by their former employer.

Will the fee go straight to the former employer in that case?

Who knows?!

Obviously it’s early days yet.

Then there are, at least in theory, claims that could not be brought during the four years when the fee regime was operating which claimants might now try to bring.

Employment Tribunal claims must be brought within three months roughly speaking so they will all be ‘out of time’ on the face of it.

But Tribunals can allow claims in ‘out of time’ if there are good enough reasons for the claims being lodged late. Those will be difficult arguments however.

Also, even if you can now bring a claim you could not bring, say, two years ago there is the problem with evidence having disappeared, witnesses having moved away or even the former employer having gone out of business.

In my view, I suspect only a very small proportion of cases that would have been brought in the last four years, had it not been for the fee system, will now come before the Tribunals.

Will Tribunal claims return to the levels they were at previously?

Again I suspect probably not, certainly not completely.

There have been other changes in recent years which have probably been forgotten about because the effect of the introduction of fees was so dramatic.

There is, for example, now no legal aid at all available for employment claims and very few organisations out there these days who can provide employment law advice to potential claimants.

So the situation is very different to what it was say 20 years ago.

On that basis, even if people don’t need to pay a fee to bring a claim they might not get the advice about whether they have a claim at all or not in the first place.

April 2014 saw the introduction of the ACAS Early Conciliation scheme which has resulted in more disputes being settled at the outset, and as result less cases that would previously have gone to the Tribunal ending up there.

But in general terms, yes, the level of claims will no doubt increase.

Employers who perhaps started to worry less and less about Employment Tribunals will probably need to appreciate the claims are considerably more likely than they were before this recent decision.

Need advice? Get in touch today

Please call Ted Flanagan, Head of Employment Law, on 01482 324252.

Or email Ted here.

You can find out more about our Employment Law services here.

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