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2017 - Tribunal Fees – here today, gone tomorrow

27 July 2017

Rhian Lloyd, Employment Tax and HR Manager of Aspire Business Partnership LLP, comments on the landmark ruling of the Supreme Court against the Government when it found it was acting unconstitutionally upon the introduction of Tribunal fees.

Where the fees’ journey began…

In July 2013, the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 were introduced which governed the payment of fees to bring an Employment Tribunal claim or appeal. The fees depended on the type of claim and whether it was a single claimant or a group bringing the case. The maximum issue fee and hearing fee totalled £1,200.

The aim of the introduction of this fee structure was to encourage employers and employees to mediate and settle disputes themselves, with attending a tribunal hearing being a last resort. Supposedly, the introduction of fees would reduce the taxpayer subsidy of the tribunal system which costed £84m to run.

I cannot comment on whether Government met their aim of employers and employees engaging in mediation, or whether it simply meant there was disgruntled employees all across the country who could not afford to being their cases to tribunal to resolve a workplace dispute, however the statistics did show that the number of employment tribunal claims reduce dramatically.

In June 2013, prior to the introduction of tribunal fees, the Ministry of Justice published statistics that demonstrated there were 25,000 claims – plainly people entering their claims prior to the introduction of fees – which dropped to 7,000 claims in August. Further statistics demonstrated, prior to the introduction of fees, approximately 48,000 new claims were made each quarter, however just 13,162 were lodged between July and September 2014.

Unison’s battle…

It has been clear since the outset that Unison did not agree with the introduction of fees as they believed it became extremely difficult for a worker to exercise their employment writes, dubbing them immoral and unfair.

However, Unison lost their bid in the High Court to overturn employment tribunal fees in December 2014. The High Court stated the proceedings were too “premature” on the basis that it was too early to judge how the tribunal fees system, would work in practice. Unison were granted permission to appeal the High Court’s decision.

Other interested parties…

In the meantime, Lord Dyson, the second most senior judge in England Wales, warned the Justice Committee that ordinary people on modest incomes would be deferred from entering litigation.

It was only in March this year that the Ministry of Justice published a report into the review of employment tribunal fees, which had a notably anti-climactic conclusion. The report established there would be no major changes to the fees or their structure, as they were fair and considerate. The report also rejected special consideration for women who allege pregnancy or maternity discrimination.

The report acknowledged the sharp decrease in tribunal fees, however, the Ministry of Justice conveniently published that this was down to the success of ACAS’ early conciliation scheme which is a mandatory process before lodging an employment tribunal claim, that aims to settle workplace disputes without going to court.

Where we are now…

Unison’s four-year legal battle was brought to the Supreme Court, where a unanimous decision was made against the Government’s tribunal fees. The judges concluded that the fees were preventing access to justice. In light of this decision, the Lord Chancellor will be quashing the fees.

Unison state the ruling means Government will have to refund more than £27m to the thousands of people charged for taking claims to tribunal since July 2013.

Justice Minister, Dominic Rabb, has commented; “We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid.”

There is speculation that Government may act quickly to introduce replacement fees through statute as a piece of primary legislation, such as an Act of Parliament, whereas the fees were initially introduced in July 2013 under a statutory instrument which is a piece of secondary legislation.

It is likely that there will be a significant rise in the number of employment tribunal claims being brought which will have implications for employers, ACAS and the tribunal system itself.

This may also bring challenges of other pieces of secondary legislation which allow the provisions of an Act to be subsequently brought into force or altered without Parliament having to pass a new Act.

With the abolishment of tribunal fees, employers will be at a greater risk of having employment tribunal claims brought against them, although the ACAS early conciliation process will remain in place. This means that employers must ensure that HR matters are dealt with in a professional, consistent and reasonable manner. We recommend that you ensure your contractual terms and staff policies are up to date and that all members of staff, including management, are familiar with this documentation, given any appropriate training and, more importantly, that it is used in any disciplinary and grievance matters.