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The supreme court has made a landmark decision today which will see the government abolish employment tribunal fees. The employment team at Harrison Drury explore what this ruling could mean for employers.

The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 SI 2013/1893 (‘the Fees Order’) has been in place since 29^th July 2013.  It ordered that for a Claimant to bring a claim to an Employment Tribunal, and an Employment Appeal Tribunal, the relevant fees must have been paid.  The fee amount payable has been determined by classifying claims into a Type A or Type B category with different payments for each.

The Fees Order was introduced with the aim of preventing claims for small amounts, and the progression of vexatious claims pursued only for the purpose of revenge.

Some employers have found that the introduction of the fees has to an extent helped to prevent unjustified claims being pursued against them but this has come at a cost. Today (26th July 2017), in a landmark case based on the principle of access to justice, the Supreme Court in R (on the application of UNISON) v Lord Chancellor has declared Employment Tribunal and Employment Appeals Tribunal fees to be unlawful under both national and EU law.

Within the case, the Supreme Court announced that the fees, which can range between £390.00 up to £1,200.00 , were illegal and restricted access to justice. In addition, the Supreme Court ruled that tribunal fees could also prevent access to justice if they rendered it futile or irrational to bring a claim.  Further, that the current Fees Order was indirectly discriminatory under S.19 of the Equality Act 2010 on the grounds that ‘Type B’ cases (including discrimination claims) attracted a higher fee, and a higher proportion of women brought Type B claims as opposed to Type A claims.

UNISON initially sought judicial review and a quashing of the current Fees Order, and put forwards that (among other things) the fees regime breached the EU principle of effectiveness (whereby the procedural requirements for domestic actions must not be liable to render practically impossible or excessively difficult the exercise of rights conferred by EU law).

On two separate occasions, UNISON’s challenge was rejected by the High Court, and was further rejected by the Court of Appeal in August 2015.  However, following the delivery of the leading judgment by Lord Reed, with which six other Supreme Judges agreed, the Supreme Court has ruled in UNISON’s favour.

So what does this mean?

While this is a very new development, and as such will demand significantly more clarification in respect of the changes that will be made going forwards, the landmark ruling is anticipated to spark a key milestone for employees who feel, and who have felt, aggrieved by the way in which they have been treated by current and / or former employers.

In addition, this development could spark a substantial rise in employment tribunal proceedings for some employers, in light of the removal of any financial obstacles.

What’s likely to happen next?

• It’s most likely that the government will look to issue a consultation paper, with a view to introducing a new lower level fees regime. Such a regime may also involve a fee payable by the employer when the ET3 form is filed.
• The Employment Tribunal will need to give consideration to an imminent review of the tribunal rules, along with and a reprogramming of the online Claim Form system. It is currently being reported that tribunals are refusing to accept fees for claims issued in person at tribunal centres, however the on-line system still requires updating.
• Within this landmark ruling, the Supreme Court announced that all fees paid between October 2013 and now will be required to be refunded by the Lord Chancellor’s Department. This particular aspect alone will generate a significant amount of work. A substantial amount of successful claims will have had fees ordered to be paid by the Respondent, as such, there will probably need to be a clear review of all decided cases.
• Consideration will also need to be given to all individuals who, prior to this ruling, were believed to have had strong cases but did not pursue the matter through to the Employment Tribunal because of costs. Will the tribunals seek to sympathise with Claimants and accept their argument that proceedings weren’t brought because of cost barriers? Or, following this landmark ruling, will it be permitted to have time frames for bringing a claim extended?

What should employers be doing in light of this ruling?

All employers should already have in place the appropriate tools i.e., policies and procedures to effectively manage their work forces.  In addition to this being a rule of good practice, such tools seek to ensure that matters are dealt with fairly and within scope of the relevant legal and regulatory requirements.

Furthermore, such practices should be subjected to review at time frames determined suitable and appropriate by management.

For employers who don’t have effective tools in place, and with certain fee ‘barriers’ set to be removed, there looks to be an increased risk to such employers if certain matters aren’t addressed in accordance with thoroughly and accurately drafted policies and procedures.

As such, we recommend that employers take the following steps in the first instance;

• Educate managers and those in senior positions as to the impact of this landmark ruling and what it could mean for your business.
• Begin a review of the management tools you currently have in place to establish if they are fit for purpose and up to date with all legal and regulatory provisions.
• Keep up to date with further develops in respect of this ruling to ensure you understand the proposed changes

The employment team at Harrison Drury are on hand with the appropriate guidance and support to ensure you continue to meet your business needs whilst effectively controlling employee risk management. If you have any more questions give the team a call on 01772 258321