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How will the Employment Tribunal fees ruling affect employers?

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This week, the Supreme Court in a major ruling held that the current Employment Tribunal fee regime introduced by the government in 2013 was unlawful.

Since the introduction of Tribunal fees there has been a drop off of around 79% in the number of claims actually being submitted to the Employment Tribunal.

Whilst on the face of it this may appear to back the intended aim of deterring employees from bringing vexatious or unmeritorious claims, the facts do not fully support this argument. Since the number of unsuccessful claims being heard in the Employment Tribunal, as a percentage of the total number of claims brought, remains at the same level it was before fees were introduced.

The Supreme Court in deciding in favour of Unison (the trade union who brought the case), adjudged that employees having to pay up to £1,200 in Tribunal fees was ‘inconsistent with access to justice’ and also contrary to the Equality Act 2010, as they disproportionately affected women.

So what does this mean for employers? 

Whilst, the current fee regime has been deemed to be unlawful, it is unlikely the fees regime will be abolished entirely. It is anticipated that the government will seek to bring in a new fees regime, with fees at a lower level for employees, which may also involve a fee payable by the employer for defending a claim against them.

Immediately following the decision the government resolved to take immediate steps to stop charging fees in employment tribunals and this has now been done.  As such, employees are now able to submit a claim to the Employment Tribunal without having to pay a fee.

The government is also being forced to repay in the region of £32million it has received by way of Tribunal fees in the time since their introduction.

Notably, this should include repayments to employers who have had to pay compensation to successful claimants, since an element of that compensation will have been to reimburse the claimant in respect of his Tribunal fees.

However, the judgement does open up a risk to employers that a former employee, who chose not to bring a claim because of fees, will still be able to do so. The employee may be able to successfully argue that it was not reasonably practicable for him or her to bring a claim at the time because they were significantly impeded from doing so by an unlawful fees regime. Or that it is just and equitable in light of the judgment for an Employment Tribunal to extend time to enable them to bring their claim.

What should employers do now?

Firstly, employers should not panic. The ruling simply returns the legal situation in respect of fees to the position it was before 2013.

In any event employers should already be treating employees fairly and within the law. Notably and irrespective of this judgement the cost of defending a claim in the Employment Tribunal is still significant and not just in financial terms. Each party has to pay its own legal costs irrespective of whether or not it is successful.

Finally, if you are the precipitant of a claim by a former employee relating to a past dismissal where they are alleging they were unable to make a claim at the time due to the Employment Tribunal fees you should seek legal advice immediately.

You can call the legal experts at LawforEmployers on 01282 695 400

Obtaining protection against Employment Tribunal claims

Here at LawforEmployers, we offer SafeGuard employment packages which offer comprehensive employment tribunal insurance along with ongoing employment law support.

The cost of Employment Tribunals can spiral, with businesses often left incurring fees upwards of £10,000. Our SafeGuard packages are specifically designed to keep your business both up to date and compliant.

Speak to our expert employment solicitors at LawforEmployers

If you have a question on the changes in Employment Tribunal fees and would like free consultation with a specialist employment law solicitor, contact LawforEmployers today.

You can speak directly to a member of our team by calling us on 01282 695 400.  Or, if you don’t have time to talk right now, you can book your free consultation by completing our online contact form.