In news that will delight claimants (and employment solicitors!) there will be no more employment tribunal fees. The Supreme Court (formerly the House of Lords) has ruled them unlawful.
Until today, employment solicitors thought that change would only come about through political means, via a Labour election win.
Fees (typically of £250 to start a claim and £950 to go to a hearing) have been with us since 2013. They were introduced by the Coalition Government to transfer some of the cost of the justice system to the actual users as opposed to the general population and to weed out weak claims.
Since the fees were introduced, the Unison union (acting with others including the ECHR) has been campaigning for their removal, citing the impact on justice. A government is not allowed to take an irrational decision so Unison argued that the decision was ‘irrational’ using statistic-heavy evidence and technical arguments such as
- The indiscriminate effect on cases, strong and weak alike.
- The discriminatory effect on claimants in protected classes, eg women, who earn less and have more trouble finding the money.
- For access to justice to be restricted by Government frustrates the will of Parliament, which has granted employment rights.
In turn, the Government argued that it had adequately addressed these arguments with a remissions process (a means test for those who could not afford the fees).
But the tribunal fees system was always a blunt tool compared to the court fees system, where fees were often lower for the same type of case and where the fee varied more with the size of the claim, which is fairer (and therefore more ‘rational’).
The Court decided (as many employment solicitors have been saying for years) that:
- Because tribunal fees do not relate to the size of the claim, they disproportionately put off smaller claims, not weaker claims.
- Despite the two price bands attempting to match smaller cases with smaller fees, they don’t even relate well to the cost of providing the justice service.
- The statistical evidence showed that the effect of fees was a dramatic and persistent fall in the number of employment tribunal claims , with a greater fall in the number of lower value claims and claims in which a financial remedy was not sought.
- Case studies of model claimants showed showed that paying fees would take below a reasonable living standard. Broadly, this is an decision that is not lawful for a government to make its citizens choose between food and justice.
- This puts women at a particular disadvantage. This is because women tend to bring discrimination claims as opposed to (the cheaper) wages claims. Although wages claims attract cheaper fees, they are more expensive pound for pound compared against the amount of the award.
The Supreme Court is the highest court in the land so this decision will not be overruled.
The Government may do nothing about it just yet; it has a lot on its plate trying to negotiate a deal on Brexit.
It may go back to the drawing board and re-design the fees system so that it produces the same revenue in a fairer way. For example making the means test reach more people and making it scale better with the value of a claim. Perhaps fees will only be payable when the case has ended and the value of the case is known.
The number of tribunal cases will increase by almost 150% overnight. This is the effect of reversing legislation that has, in the past four years, after the fees were introduced, the number of claims brought to employment tribunals fell by up to 70%.
What about fees paid in the last four years? What other implications are there?
The Government has already announced that no more fees will be charged and it will have to return all fees paid in the last four years.
We are pro-actively contacting all our previous clients about this. Do contact us if you would like to discuss this with us.
If any employers have lost cases in the last four years, they will have been ordered to reimburse the claimant their tribunal fees. Employers will want their money back under common-law legal principles and employees will want to say no on the basis that the money has been spent. The same applies not only to cases that employers have lost, but also cases that they have settled.
We don’t know whether the Government will do an automated reimbursement through the banking system or simply repay on an as and when basis.
Legal commentators and employment solicitors are unclear on what should happen in the case of claimants whose cases were struck out for non-payment of the £950 hearing fee in the last four years. In our view, those claimants should be given another bite of the cherry, especially where the reason for non-payment was genuine hardship.
We are also reaching out proactively to claimants who decided not to bring or continue claims in the last four years.
Photo courtesy of Houses of Parliament