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The Tribunal Floodgates are open – (Or are they?)

» Posted on:3 Aug 2017

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Tribunal Fees

The biggest single change to employment law in my 30 year career as an employment lawyer was brought about in July 2013. This was when aggrieved employees could no longer simply complete and submit a Claim Form to their local Employment Tribunal Office without any payment. Instead, different categories of fees were introduced and claims such as discrimination and unfair dismissal could only be issued upon the payment of a £250 fee and could not proceed to a final hearing until a further £950 had been paid. Whilst there were fee remission provisions, the impact of the introduction of fees was that the number of claims reduced by a figure somewhere between 70% and 80%.

Many employers were delighted at the introduction of the new regime. The change undoubtedly removed potential nuisance value claims which had merely been issued by former employees on a speculative basis. HR Teams were reduced as a result and law firms made redundancies from their employment teams. On many occasions before the change I was instructed not to defend a nuisance claim but to submit proposals on a commercial basis with a view to avoiding incurring the legal costs. Simply put, it was cheaper to pay up than fight. It was thought that the introduction of these fees would have the potential impact of removing claims of this nature. Evidence suggests that assumption was wrong.

Unison Judgement

In the relevant Supreme Court case Unison complained that the introduction of the new fees regime denied access to justice. In its Judgment on Thursday of last week 27th July 2017, the court agreed.

So what does this mean?

  1. On the basis that the regime was regarded as unlawful, the Tribunal service will need to refund every Tribunal fee that has been paid by a Claimant since 2013.
  2. There will have to be a rethink about the fees regime (which is unlikely to be abolished in its entirety). Fees for claimants may be reduced but there is also some suggestion that employers may also have to pay a fee to defend a potential claim.
  3. At present, however no fees are payable upon issuing a claim. So put simply, employers can expect an increase in the number of claims in the short to medium term. But these may not be limited to recent dismissals. There is a possibility that a number of older claims may be subject to attempts for the Tribunal to consider the merits of a case even though it occurred long before the 3 month time limit which would ordinarily be applicable. This concern relates to all potential Claimants who decided, owing to their financial circumstances that they could not pursue a claim owing to the fees that were required. Most claims must be submitted within 3 months of the event which gives rise to that claim. However, it is possible for a Claimant to argue that they were unable to pursue a claim for unfair dismissal because they simply could not afford the fees. Now that the Unison decision has been made that the fees regime itself is unlawful, it could be argued that it was not reasonably practicable for the claim to be issued, thereby extending the time limit for issuing a claim, even though the dismissal may have taken place 3 years ago. This has got to be tested yet by the Tribunal but it is extremely likely that there will be a number of arguments dealing with unfair dismissal claims on this basis. In addition, the same could be said for potential discrimination claims whereby the Tribunal may find it just and equitable to extend the time for issuing a claim (and for which cases there is no cap on the compensation which may be claimed).

The provisions in connection with compulsory ACAS Conciliation and other compensation caps regarding loss of earnings still remain but the situation regarding both past and future Employment Tribunal claims must be a concern for employers. Employers should ensure that they carefully maintain all relevant documentation and personnel records of all former (as well as current) employees.

Peter Byrne, Head of Employment Law

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