Employment Tribunal Fees to be Scrapped

The Supreme Court has announced that the imposition of employment tribunal fees is unlawful; our employment solicitor Alex Pearce explains.

The judgment by the Supreme Court overturned rulings in both the High Court and the Court of Appeal. Employment tribunal fees were first introduced in 2013 by the then coalition government. The issue fee for a ‘Type A’ claim, (for example, unlawful deductions from wages), was £160 with a hearing fee of £230.  The issue fee for a ‘Type B’ claim (unfair dismissal or discrimination), was £250 with a hearing fee of £950. This led to various calls that the introduction of employment tribunal fees was a barrier to access to justice for many across the UK.

Statistics showed that the sudden arrival of tribunal fees resulted in the number of employment claims being issued falling by between 60% and 80%. It remains to be seen how employers will react to the removal of employment fees, although some employers have in the past commented that they too thought the level of employment tribunal fees prohibited employees from bringing claims and ultimately prevented access to justice.

It is also worthy to note that the Supreme Court confirmed that it was indirectly discriminatory to charge higher fees for a Type B claims (which ironically enough includes discrimination claims) than Type A claims.

It is understood that employment tribunals are now refusing to take payment if an ET1 is presented in person at one of the tribunals and that whilst the ET1 form online still requires a payment of a fee, this is in the process of being amended.

The Supreme Court does, however, recognise the important role that employment tribunal fees can play, but agrees that there needs to be a balance.  Those that have already paid employment tribunal fees are to receive a refund, which is expected to cost in the region of £32million.

It remains to be seen what the government will do going forward; they may take steps to put in place a fee structure which is more proportionate. What this will look like remains unclear and, given both Labour and the Liberal Democrats have stated their opposition to employment tribunal fees, the government may find it difficult to pass legislation imposing a more ‘balanced’ fee system. It will be interesting to see if the number of claims increases to post-summer 2013 levels after this announcement.

There is likely to be a rise in a number of claims issued and employers will potentially have to consider reaching a resolution at the ACAS Early Conciliation Stage rather than waiting to see if an employee issues a claim. We are already seeing many of our employee clients taking a more robust view. Whether you are an employee or an employer, employment law continues to be a fast-moving area of law and will no doubt continue to be.

MORE INFORMATION 

If you require further legal advice on making a claim to an employment tribunal or need further information on the fee changes, please contact our Employment Department – our team of expert solicitors will be able to assist. Call on 01708 229444 or email us using our contact form.

This article was written by Alexander Pearce, Employment Law Associate at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of July 2017.