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Employment Tribunal fees unlawful – does this re-open the flood gates?

28th July 2017

Employers may worry that the Supreme Court’s effective decision to quash unlawful Employment Tribunal fees will reopen a flood gate of employment claims, and that there will be a return to the days before fees when vexatious litigation was perceived to be unchecked causing businesses to suffer in the face of spurious claims.

Jason Alcock, a solicitor with Ansons, explains that ‘as access to the Employment Tribunal Service now becomes free once more, it is likely that there will be an increase in the amount of cases, and certainly individual cases, issued and pursued.’

‘That said, since the point that fees had been introduced, there are other changes which will assist in reducing such claims, and mechanisms which have been finely tuned which will help to keep those vexatious claims in check’.

These include:

  • the change in the minimum qualification period for unfair dismissal;
  • the requirement for ACAS early conciliation;
  • the paper-sift of claims and early case management to remove those claims which are without merit; and
  • the ability for the Tribunal to award costs, either summarily at £20,000 or as under detailed assessment before the County Courts for the truly spurious claims.

Employers should not see this as truly adverse scenario, but as an opportunity to review their practices and ensure that they are compliant with current employment law to prevent such cases arising in the first instance.

The judgment

This week the Supreme Court provided its decision in the case of R (on the application of UNISON) –v- the Lord Chancellor, a challenge raised by UNISON that the imposition of fees to issue a claim before the Employment Tribunal in 2013 was unlawful.

This case has previously been before the lower courts and failed. The Supreme Court overturned the prior decisions, confirming that the government’s decision to impose employment tribunal fees was in fact unlawful.

Lord Justice Reed provided the leading judgment. While he does make the statement that there is “no dispute that the purposes which underlay the making of the Fees Order are legitimate”, he goes on to find that “the Lord Chancellor cannot, however, lawfully impose whatever fees he chooses … It follows that … the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice”.

It was explained that fees must be set at a “level that everyone can afford …. The evidence now before the court, considered realistically and as a whole, leads to the conclusion that that requirement is not met”.

In a very clear argument he sets out that “Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households … can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable”.
It is clear that the thrust of LJ Reed’s argument revolves entirely around the particularly articulate requirement that: “In order for the courts to perform [their] role, people must in principle have unimpeded access to them. Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade”.

Lady Hale also goes on to deal with the issue of the claim that the fees were indirectly discriminatory to women.

The implications

As of 27 July 2017, it is understood that ET1 forms filed with the Tribunal on paper are not seeing fees charged before the claim can be issued.

However, please note that the electronic forms still have a fee paying element to them, although we understand that the government will be removing that in due course.

As for fees paid since 2013, their imposition was unlawful, which means that all fees charged, some £32 million, will have to be refunded accordingly to the relevant parties.

For advice

If you require assistance with reviewing your present position, policies, procedures and practices, then please do not hesitate to contact Jason Alcock on 01543 431185 or email jalcock@ansonssolicitors.com.

 

The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.