Employment Tribunal Fees are Unlawful

Employment Tribunal Fees are Unlawful – Supreme Court Ruling – 26/7/2017 by Catalina Mandoiu

Today – 26th July 2017 – is an important day for all the employees who have ever been wronged at work, or who might be in the future. The Supreme Court has upheld UNISON’s appeal against the lawfulness of Employment Tribunal fees which were introduced in 2013.

In 2013, the Government introduced a fee scheme, dividing the employment claims into two categories – Type A claims (unlawful deduction from wages and similar) charged with £390 and Type B claims (unfair dismissal and discrimination) charged with £1,200. Through such structure, the Government was aiming to discourage claims that had little or no merit and to direct parties towards settlements and create a more intense usage of alternative dispute resolution tools.

Today, the Supreme Court considered that the such fees are unlawful and as a consequence, must be eliminated. The decision was based on the fact that the fee system had the effect of denying many employees access to justice. The Employment Tribunal fees scheme discouraged many employees to seek justice and to fight work related discrimination. It has been shown that there was a constant and dramatic decline in the number of Employment Tribunal claims brought. The fees introduced in 2013 mainly affected the lower value claims, leading to the conclusion that is unlawful that Employment Tribunal claims are based on complexity and not value.

One relevant aspect raised by the Supreme Court was that not all Employment Tribunal claims result in a pecuniary award. This made the entire process even more discriminatory, as the employee was asked to pay a fee at the beginning of the proceedings, without any chance of recovering those money at the end of the process.

The Supreme Court also took into consideration various examples and found out that a person earning the National Living Wage would generally exceed the level of income for remission, therefore, that person was standing no chance of remission on the hearing fee for a Type A. Nonetheless, the same person was eligible only for partial remission on the hearing fee for a Type B claim.

A different and more pressing issue that The Supreme Court looked at was the claimants’ ability to recover fees. Even if in the majority of cases in which a claimant is successful, the respondent employer is ordered to pay the fees as part of the final award. However, this was not the case in all the scenarios and a successful claimant was forced to take enforcement action against the respondent, incurring new fees.

The Supreme Court concluded that the fees were unaffordable unless claimants reduced daily spending which was ‘ordinary and reasonable for maintaining living standards’ and that it was unreasonable and abusive for claimants to reduce necessary spending.

Furthermore, it has been concluded that the fee system that was in place was especially discriminatory against women. All sex and maternity/pregnancy discrimination claims are both Type B which means that more women than men are likely to bring such cases in front of the Employment Tribunal. In such circumstances, the way the fees were divided put women at higher discrimination level.

From now on, the Employment Tribunal needs to ensure that no more fees are imposed to those seeking justice. In addition, the Government has the duty to repay the £27 million in fees that have been paid since 2013.

An interesting aspect that might need further clarification is whether any claimant can now successfully argue that it was not discriminatory and unlawful for them to present a claim where they were prevented or discouraged by the fees that they would incur. If this will be the case, then it will represent a new era for employment cases and this might mean that respondents will be obliged to consider and defend claims dating back to 2013.

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