Since July 2013, employees who take their case to the employment tribunal have faced fees ranging from £390 for contractual breaches, up to £1,200 for unfair dismissal claims. If they wanted to appeal the decision, this may have cost clients another £1,600. However, this is soon to change, according to a recent decision made by the supreme court on 26th July.
When the tribunal fees were initially introduced, the government had two main objectives. Firstly, that the fees covered some of the costs of running the tribunal system were paid by claimants themselves rather than normal taxpayers. Secondly, the fees were put in place to encourage an increase in out of court settlements, through alternative dispute resolution (ADR) and mediation. Estimates claimed, that the fees would help British businesses save an annual bill of around £6 million, by limiting the number of cases brought forward.
Figures show that the number of employment cases brought last year to the tribunal was 73% lower than statistics in 2012-2013. This sharp drop in claims, prompted the Supreme Court to rule on a case brought by the trade union Unison, that the fee schedule currently in place, “prevented access to justice and is therefore unlawful.” The fees may have reduced the number of claims going forward, however, this was due to the fact that many couldn’t afford to challenge employment disputes, effectively cutting off their right to access.
The decision headed by the court’s president, Lord Neuberger, voted in favour of the trade union Unison, and agreed that fees were preventing employees, especially those on lower incomes from getting the necessary legal support.
Dave Prentis, the Unison’s general secretary, commented: “If an employer breaks the law
and treats one of their employees unfairly, they should be challenged. It cannot be right that unscrupulous bosses are escaping punishment because people simply don’t have the money to pursue a case. The introduction of fees was a terrible decision. Bad employers are having a field day, safe in the knowledge that few will be able to afford to challenge them at a tribunal.” He has spoken out that the supreme court ruling was a major victory for employees in the UK.
But what does this mean for employees? The Ministry of Justice said it would take immediate action to stop charging fees for employment tribunals and put in place arrangements to refund those who have already paid. Unison claimed that more than £27m of fees needed to be refunded for claims made since July 2013. It is yet to be determined how the Treasury will reimbursed employees, however, a confirmed reclaim procedure is expected to be announced this month.
Some businesses expressed concern about the recent changes in employment tribunal fees. Head of Employment and Skills Policy at the Institute of Directors, Seamus Nevin, said the supreme court ruling may “open the door to a spike in malicious or vexatious claims”.
The government are likely to introduce more proportionate fees that allow equal access to justice. It is predicted that the number of tribunal claims may significant increase as a result of the supreme court’s decision. Employees who could not afford to purse a claim against their employer, may decide to challenge their company for unfair dismissal or harassment, or reinstate a claim that had been previously dismissed. For cases such as these, the tribunal can apply the “just and equitable” test, taking into consideration whether to approve the claim and issue proceedings. After using ACAS Early Conciliation to resolve the employment dispute, the decision to continue, ultimately lies with the Employment Tribunal.
The supreme court’s decision is one step towards clamping down on unlawful business practices, by offering equality to justice for all. However, the future feasibility of the government reimbursements and new legislation for making employment claims more accessible, will truly ensure that employees across the UK receive the compensation they deserve.