Employment Tribunal Fees System is Deemed Unlawful
August 3, 2017
The Supreme Court has held that the requirement for claimants to pay a fee to bring an employment tribunal claim is unlawful and that the legislation that introduced the fees must be quashed
Implications for employers
The risk to employers of employment tribunal claims are now highly likely to return to pre-July 2013 levels.
The absence of fees will have a big impact on employers’ strategies on the use of settlement agreements, and decision-making on settling or fighting claims when they are contacted by ACAS for early conciliation.
As of this moment the fees are unlawful and therefore should not be charged at the current level going forward – it remains to be seen how quickly the Employment Tribunal can update its claim process and rules – but an increase in the number of claims can be expected.
It also remains to be seen if the Employment Tribunal will allow a claim to be submitted out of time (i.e. after the deadline to bring a claim passed) on the basis that it was not financially practicable for the employee to issue a claim due to the level of the fees. If so, then it is possible that there could be a considerable number of retroactive claims submitted.
Finally, the Government have agreed to refund all fees paid. These will normally be paid to the employee but where the employee won their case then it will often be the case that the Employer reimbursed the Employee for the cost of the fees through the compensation award and therefore in theory should receive the refund itself.
What will happen next?
The Government is expected to launch a new consultation on the level of fees and in the interim for fees to be suspended and refunds to take place. Employers do not need to do anything at this stage but should be mindful of the fact that there could be a large increase in the number of fees issued (there was an 80% reduction in claims made after fees were introduced); therefore it is especially prudent to ensure that your management of employee relations and employment rights is in line with current regulations and best practice.
Source: XpertHR, 26th July 2017 & HS Direct Ltd, 27th July 2017
