Employment Tribunal fees are abolished by the Supreme court
The Supreme Court has today ruled that the order which introduced employment tribunal fees was unlawful and has quashed it. In response the government has announced that it will take immediate steps to stop charging fees and also to reimburse those who have paid the fees in the past.
It was widely acknowledged that the introduction of fees operated as a major deterrent to employees who were thinking of bringing claims in the employment tribunal. In fact, the number of claims being brought fell by as much as 80% after fees became payable.
Although the headline news is clear, there are a number of matters which are still unresolved. For example, while it seems clear that claimants will have their fees reimbursed, what about respondent employers who had to pay fees as part of a remedy order (or even as part of a confidential settlement agreement)? Will they also be able to seek reimbursement?
More fundamentally, the Supreme Court did not find that fees themselves were unlawful, rather that the level of the fees was set too high. It therefore remains to be seen whether the government will seek to introduce new legislation providing for lower fees. That of course could prove difficult. With Brexit the government has other legislative priorities at the moment, and since the recent election has been operating without an overall majority in the House of Commons.
We therefore anticipate that this judgment could lead to an immediate sharp rise in the number of employees looking to lodge new claims (to try and beat the introduction of a new fees regime) and, in any event, a sustained increase in the long term.
That said, it is worth noting that the Acas early conciliation procedure is still in place, and remains a necessary step before a claim can be brought in the tribunal. Conciliation now assumes greater importance for those employers wishing to avoid litigation, and it must be handled carefully as a result. Waiting to see whether an employee is willing to find up to £250 to issue their claim may no longer be the best strategy.
Having benefited from a regime in which tribunal claims had become rare, now would be a good time for employers to make sure their exposure to claims is minimised.
If you have any questions as a result of this development, please feel free to call one or our solicitors on 020 7043 2300. We will be pleased to discuss resolving any legal concerns you may have.