REWARD INSIGHT
The impact of tribunal fee abolition
Danny Done, managing director at Portfolio Payroll, sets out the effect of the Supreme Court’s recent judgment
O n 26 July 2017, almost four years to the day since employment tribunal fees were introduced, the system was abolished with immediate effect after the Supreme Court ruled that it was unlawful. This move will have a significant impact on all corners of the employment law world and employers should take the opportunity to review their current practices. In July 2013, a system was introduced which saw claimants having to pay a fee to take their employer to tribunal. Two different levels of fee were set: £390 for Type A claims (unpaid wages etc) and £1,200 for Type B claims (unfair dismissal, discrimination etc). Claim numbers declined significantly with some reports showing an overall reduction of 79% after fees were introduced. Upon the scheme’s introduction, trade union UNISON lodged a judicial review on the basis that charging a fee to make a claim blocked access to justice for a huge part of the population. Certain groups of people were disproportionately affected, they said. Women, they pointed out, tend to earn less than men and so would be affected by the scheme more than men making fees indirectly discriminatory on the ground of sex. Several court hearings took place but UNISON was unable to produce sufficient evidence of the unlawfulness of the scheme because not enough time had passed since the introduction to be able to draw valid results. However, UNISON was finally successful in its challenge. The Supreme Court has now decided that fees were set at a level which restricted access to justice and discriminated against women and those with particular protected characteristics. Essentially, the fees were
so high that people could not enforce their employment rights by using the tribunal system. This decision means that, once again, it is free to make a claim to the Employment Tribunal and the Employment Appeal Tribunal. So what do we now expect in terms of claims numbers? Shortly before fees were introduced, the number of unfair dismissal claims each year was consistently around the 50,000 mark; this dropped to around 12,000 per year afterwards. It is impossible to say whether claims will reach the former level again but it may give a good indication of future growth. However, potential claimants must now lodge their intention to make a claim with ACAS (Advisory, Conciliation and Arbitration Service) in accordance with the early conciliation procedure and this may continue to weed out some of the vexatious claims that the introduction of fees was hoped, in part, to achieve. Although potential claimants must let ACAS know they intend to make a claim, there is no requirement to actually engage in attempts at conciliation so this will not be seen by all as a block to proceeding to the tribunal system. Employers who may have adopted certain practices in light of the reduced risk of being taken to tribunal will now have to be alert to the increased likelihood of both valid and nuisance claims. The ...fees were so high that people could not enforce their employment rights...
judgment also opens up the possibility of a challenge to previous actions. The normal time limit to make a claim is three months but the Employment Tribunal has the power to extend this where – in an unfair dismissal claim – it was not ‘reasonably practicable’ for the claim to be made within that timeframe. For discrimination claims, the time limit will be extended where it is ‘just and equitable’ to do so. It is open for claimants to assert the time limit should be extended because the requirement to pay a fee made it not reasonably practicable for their claim to be made in time, for example. There is already at least one example of a claimant successfully arguing this point, and there are likely to be more. It is not possible to put a finite time frame on how far back employers should look, but a review of previous dismissals or other action which could be perceived as detrimental to employees should be done to assess potential exposure. A stay on all claims relying on the judgment that fees were unlawful was implemented while the Court Service made certain administrative decisions on how to proceed but has since been lifted. The government has also undertaken to refund any fee paid since introduction. This applies to all fees paid by both claimants to make a claim and respondents for any applications for review etc. This will be a tricky administrative exercise because employers who unsuccessfully defended claim at tribunal then had to reimburse the claimant for their initial outlay. It is possible that some reimbursements were not made so the Court Service will have to track the status of each fee paid in almost four years. An announcement on how this will be done is expected in September. Q
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| Professional in Payroll, Pensions and Reward | October 2017 | Issue 34
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