On 26 July 2017 the Supreme Court issued a judgment confirming that tribunal fees were repealed with immediate effect and not only that, they were ‘void ab initio’ i.e. from July 2013 when they were initially introduced. This is a major decision and it has left the tribunals in disarray as they scramble to deal with the sudden increase in tribunal claims. So what has it all been about?
The Government introduced tribunal fees in July 2013 with the aim of saving costs and deterring weak claims. Claimants had to pay £1,200 to bring a claim of unfair dismissal or discrimination and £390 for a straightforward claim such as unpaid wages. Not surprisingly the number of claims plummeted; the introduction of fees led to 79% fewer tribunal claims. There was opposition to the fees regime from the outset with Unison (and others) challenging its lawfulness through the courts. In a masterly judgment referring back to the Magna Carta, the Supreme Court finally ruled that tribunal fees prevented access to justice and the level of fees charged were not justified. Government arguments to the contrary were dealt with swiftly.
What next for tribunal fees?
On 20 October, the Government announced it will be contacting up to a thousand people and inviting them to apply for refunds. The full scheme for the repayment of tribunal fees, estimated at around £32 million, is to be opened up ‘in the coming weeks’ and those interested can apply now to be registered. The scheme will have to deal with tricky issues such as reimbursing group claims and fees paid by respondents. There is also the enormous group of potential claimants who did not bring claims at all because of the fees and who may now, to the concern of employers, be able to do so. The Supreme Court left the door open for a system of lower tribunal fees. With the Government focussed on Brexit and having to deal with the administrative and costs fallout of their old fees regime, it had been thought this would not be high on the agenda. However, the 20 October announcement indicates this is an issue to be revisited. Employers will also be reassured that the Acas Early Conciliation procedure (requiring claimants to first register with them so that settlement can be facilitated without the need for tribunal proceedings) will continue. This process in itself has resulted in many claims not being filed at tribunal. Anecdotally we are aware that the tribunals are currently playing catch up and there are currently delays in tribunal claims and court applications being processed.
What claims can we expect to see more of?
There is no doubt that until tribunal fees are restored, tribunal claims across the employment spectrum will increase and even then may never drop to recent levels. On the basis that higher tribunal fees were indirectly discriminatory to women (as commented on in the Supreme Court Judgment by Lady Hale), unlawful discrimination claims, particularly those of lower value that were deterred by the fees, could be on the rise. We can also expect more claims for other smaller amounts such as claims for unpaid wages. There is a current trend for claims by those in the ‘gig’ economy that they are workers and so entitled to holiday pay and the national minimum wage, and these may increase too.
How will this impact you?
Employers have always been wary of tribunal claims, even with the tribunal fees. However we are likely to see an increase in settlement agreements to avoid the increased risk. Now is a good time to put your house in order by reviewing your policies and practices to ensure any dismissals are fair and that discrimination is not tolerated in your business. The employment team will be holding a mock employment tribunal in Spring 2018. I you are interested in receiving and invitation to this event please contact our marketing team.
If you have any queries in relation to the issues mentioned in this blog please contact your usual Morrisons adviser.