UK Employment Law Update August 2017

EMPLOYMENT TRIBUNAL FEES

Due to the decision of the Supreme Court last week, tribunal fees have ceased to operate with immediate effect. Employer organisations are expressing concern over the potential impact of this decision.

Tribunal fees were introduced in 2013 requiring claimants to pay an issue fee when registering a claim, and a hearing fee in advance of the hearing. The total fees ranged from £390 for simple monetary claims to £1200 for more complicated cases such as unfair dismissal or unlawful discrimination claims. There were limited circumstances in which remission from fees was allowed, but in the majority of cases, fees applied.

As a consequence of these fees, employment tribunal claims reduced by 70% overnight.

While this was no doubt welcome news for employers, the fees were highly controversial as they were seen as operating to prevent access to justice. The trade union, UNISON, mounted a legal challenge to the fee regime.

The case after 4 years reached the Supreme Court, the highest court in the UK. Having considered the case the Supreme Court Judges have unanimously held that the fee regime is unlawful and have quashed with immediate effect the legislation requiring the charging of fees.

The Supreme Court determined that the fee regime, which was introduced by virtue of secondary legislation, was in breach of both UK and EU law. The Supreme Court citing various elements of UK law, including the Magna Carta, identified that one of the issues was that the government had exceeded its powers by making such an important change to a constitutional right by virtue secondary legislation, rather than having the authorisation of an Act of Parliament.

So with immediate effect claimants will now be able to bring claims without paying fees. This will undoubtedly result in an increase in claims.

While this may be alarming for employers, matters need to be given some perspective. Even at the height of tribunal claims, when they were inflated by group actions in the airline industry and reached 236, 000 claims in 2009/10, the number of claims amounted to less than 1% of the working population bringing a claim in the year in question. However, that is not to underestimate the problem created when in receipt of a claim.

In the immediate aftermath of the Supreme Court decision there is some uncertainty on how the government, who have accepted the decision, will further respond: that is to what extent the government will be able to reintroduce fees, given their competing priorities and or lack of a majority, and if they do at what level will they be set. A number of commentators are suggesting if fees are reintroduced they will be at a lower level. Further, if fees are reintroduced the government may decide to do so by an Act of Parliament rather than secondary legislation, in order to avoid the error identified by the Supreme Court.

It is a matter of watching this space.

In the interim, at the very least, employers are advised to ensure they are operating proper procedures and have appropriate documentation in place to help protect against claims being brought and or in defending themselves against any claim they may receive.

Any clients or contacts who have received a tribunal claim or have concerns about employment tribunals or any other employment law matter should contact us, so we can refer you to our UK employment law specialists

Please note this document provides very basic and general information and should not be read as legal advice. This is particularly so as each case hinges on its own merits.