Employment tribunal fees look set to be scrapped after a landmark court decision this morning.
The Supreme Court has ruled that the fees – introduced in July 2013 – are unlawful, and thousands of people who paid to take their employers to tribunals will need to be refunded. Fees can be as high as £1,200, and have caused a fall in the overall number of tribunal cases.
The decision is a result of a legal challenge from public service union UNISON. Its general secretary Dave Prentis described the ruling as a “major victory” for employees. “The government is not above the law,” he said. “But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.
“The government has been acting unlawfully, and has been proved wrong – not just on simple economics but on constitutional law and basic fairness too. It’s a major victory for employees everywhere. UNISON took the case on behalf of anyone who’s ever been wronged at work, or who might be in future. Unscrupulous employers no longer have the upper hand.”
"This is a stunning victory for UNISON and easily the most significant employment case for many years," commented Nicholas Robertson, head of employment in London at Mayer Brown.
Luke Bowery, a partner in the employment team at UK law firm Burges Salmon, explained that the ruling will come as a surprise to many. “The decision is unexpected in light of the previous court decisions to date,” he said. “However, the dramatic fall-off in tribunal claims since then has led not only unions but also many employers and business groups to question whether the fee levels were set too high.”
However, Beverley Sunderland, managing director of Crossland Employment Solicitors, said that this does not mean tribunal fees will necessarily be gone for good. “The government’s next move will be to try and introduce legislation to properly impose tribunal fees,” she said. “But, as they do not have a majority and given the clear and unequivocal statistics of the impact of fees on the numbers of claims brought, it is difficult to see how any such legislation will get through parliament as no MP, whatever their politics, is likely to vote for it.”
Robertson said, however, that the number of tribunal claims brought may still not return to former levels once the fees are dropped. “It remains to be seen if tribunal claims will return to the levels [seen] before the introduction of the fees regime," he said. "My view is that they will not return to those levels because the Acas mandatory conciliation scheme will continue to encourage parties to settle claims before litigation. Now that the fees regime for employment tribunals has gone, I suspect employers will be more likely to settle at the Acas stage rather than waiting to see if claimants follow through and issue a claim.”
This ruling coincides with the publication of the Taylor Review into modern working practices, which called on the government to reduce the cost of tribunal fees but did not go as far as recommending that it abolish them.
Speaking on BBC Radio 4, the report's author Matthew Taylor said that he recommended there should be a free preliminary judgement before proceeding to a full trial. "We recognise in the report that... it would be better if those fees weren’t so high and we encourage the government to continue to look at that issue,” he said.