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Motor Trade Legal News

Employment Tribunal Fees – Supreme Court Decision

In an important decision announced this morning, the Supreme Court has allowed an appeal by the Trade Union, Unison.

It has ruled that the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013 (which led to a 70% reduction in claims) is unlawful and will be quashed. Unison had argued that fees prevented workers getting access to justice.

In the main Judgment, the Supreme Court noted a contrast between the level of fees in the Tribunal, and the small claims County Court (where it is very much cheaper to bring a claim for a small sum of money).  Lord Reed emphasised the importance of the rule of law and the specific statutory rights granted by Parliament may not be reduced by statutory instrument from a minister. He relied on the fact that Tribunal cases are important for society as a whole, not just the individuals involved.

Baroness Hale gave a separate short Judgment on the indirect discrimination aspects of the fees regime.  She concluded that it was indirectly discriminatory to charge higher fees for type “B” claims (which include discrimination claims) than type “A” claims.

Comment

The Supreme Court’s decision throws everything up in the air somewhat and there is some uncertainty about what will happen next.  However for employers the headlines would appear to be:

  • It is unlikely that the fees regime will be abolished entirely.  It is probable that the Government will issue a consultation paper and then bring in a new fees regime, with fees at a lower level and/or involving a fee payable by the employer when the employer lodges its defence (response form);
  • It is likely to result in an increase in Tribunal claims over the next few years, so employers will face increased litigation.

It may also be necessary for the current Tribunal rules to be re-written.  The Supreme Court has made it clear that all fees paid between paid between 2013 and now will have to be refunded by the Lord Chancellor’s Department.  The Government has already said after the ruling that it will take immediate steps to stop charging employment tribunal fees and refund those who have paid. This could of course become an administrative nightmare as many successful claims will have had fees ordered to be paid by the Respondent and there will probably need to be a manual search of all decided cases.

Finally, there may also be arguments that potential claimants could argue that they were deterred from bringing a claim (in the last 4 years) because of the unlawful fees regime.  In that case, Tribunals may decide that it is just and equitable to extend the time for bringing claims.  If that happens, it is very difficult to see how the Tribunal system would be able to cope, as it has been significantly scaled down and reduced in size since 2013.

This is a developing story, so look out for future updates as we know more.