Back in July, a landmark legal decision announced that employment tribunal fees have been scrapped. But how has this pivotal ruling come about and what does it mean for businesses? Two months on, Topic UK speaks to Caroline Acton, solicitor at ESP law, to find out…
If we look back only a few years, many employers will recall a time when access to the employment tribunal was free of charge. However, in 2013, the introduction of a new fee regime meant that varying costs were then imposed for anyone bringing a claim forward.
Fees started at £160 for issuing claims such as unlawful deduction from wages or breach of contract, plus a subsequent hearing fee of £230. However, for claims such as unfair dismissal or discrimination, these came with an issue fee of £250 plus a hearing fee of £950.
Perhaps unsurprisingly, costs of this nature resulted in a dramatic decline in the number of tribunal claims being lodged by employees.
But this could now be a thing of the past. On 26 July, a four year fight by the public service union UNISON reached a victorious outcome. The Supreme Court – the highest legal authority in the UK – quashed the tribunal fee regime, ruling unanimously that the Government was acting unlawfully in their introduction of this system. It was agreed that the fees are unaffordable and so prevent claimants from accessing justice.
So what does this mean?
- Now, claimants in employment tribunal cases cannot be required to pay fees.
- All fees paid since 2013 – a figure reported to be in excess of £27m – will have to be refunded by the Lord Chancellor’s Department. This process will be far from straightforward, especially in cases where respondents have been ordered to pay the fees because the claimant has won.
- The ruling does not prevent an alternative fee structure from being introduced, but any new charges would need to be set at a level everyone can afford.
And for employers?
It is likely that there will be a rise in the number of employment tribunal claims moving forward, plus also a potential argument from those who were previously deterred from making a claim because they couldn’t afford the associated costs. Employers are encouraged to seek legal advice if this situation arises.
Moving forwards, this development further emphasises the need for organisations to act in a fair, reasonable and consistent manner with all employees, in the hope of never finding themselves facing a tribunal claim. In instances where specialist HR and/or legal advice is required, the advice and knowledge of professionals should also always be sought.
For more information, visit https://esphr.co.uk/