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Supreme Court judgment: Employment Tribunal fees are unlawful

The Supreme Court judgement that employment fees are unlawful and should be quashed is being hailed as a victory for workers. In this article we look at the implications of the decision for employers.

In probably the most important decision in employment law for 50 years, the Supreme Court has ruled that Claimants’ fees payable to bring a claim in the Employment Tribunal and the Employment Appeal Tribunal are unlawful.

This is a major turnaround and means that with immediate effect, employees will no longer have to pay £250 to apply for an unfair dismissal claim or the follow-up £950 fee for a hearing. In addition the £32m already paid in fees in the last four years will have to be fully repaid by the Government.

Furthermore no fees will be payable by claimants for any other Tribunal claim, including for example, race, sex, age or disability discrimination; nor will there be any fees paid to appeal a claim in the Employment Appeal Tribunal. Whether or not the Government has the appetite to revisit this remains to be seen.

The aim of the Fee Order was to transfer some of the cost burden of the Employment Tribunal system from general taxpayers to actual users of the system. But Unison, one of the UK’s largest trade unions, argued that the order prevented access to justice for those unable to afford the costs of bringing their case.

The Supreme Court upheld Unison’s appeal, agreeing that the fees order was unlawful for reason that the effect of the order was to restrict access to justice for would-be claimants. The Court has also made it clear that, for the future, the strongest possible endorsement will be given to the fundamental public importance of access to justice.

However the message is clear to employers; beware. Since the introduction of the fees in 2013, in a bid to reduce the number of unmeritorious cases and to encourage early settlement, there has been a 79% drop in tribunal claims. It now seems very likely that there will be a rapid and significant increase in Tribunal applications.

The Court noted a dramatic and persistent fall in the number of claims brought in the Employment Tribunals with fees being the most frequently cited reason for not submitting a claim.

The decision is being heralded as a victory for “workers and common sense” and provides clear statements on the importance of the rule of law and the constitutional right to access to justice.

It’s good news for workers who faced these fees usually at a financially vulnerable time for them. However employers can expect to see a rise in the number of Tribunal claims threatened and then brought and a return to a more litigious working culture.

For further information please contact our Employment & HR team.