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The effects of removing employment tribunal fees

The effects of removing employment tribunal fees

Q: I have seen in the news that employment tribunal fees have now been ruled unlawful. What are the key things employers need to know about this ruling? 

A: Following Unison’s judicial review challenge against the tribunal fee regime, the Supreme Court has ruled that fees are unlawful. 

Fees were introduced in July 2013 with claimants having to pay up to £1,200 to make a claim dependent on the matter in issue. The government intended to transfer the responsibility of paying for tribunals from the taxpayer to those using the system. At each stage of their challenge against fees, Unison has been unsuccessful. However, the Supreme Court found that fees were set so high that they restricted people from enforcing their employment rights and discriminated against women and those with particular protected characteristics. 

This ruling meant that from July 26 claimants no longer had to pay a fee to make a tribunal claim. The removal of fees could see the number of tribunal claims reaching pre-2013 levels when, following the introduction of the requirement to pay fees, the level of claims fell about 70 per cent. Employees who feel mistreated by their employer are unlikely to be deterred from making a claim. 

Employers might also see an influx of claims in the short term as most have a three-month time limit from the unlawful act, or the last in a series of acts, within which the claim has to be lodged. Those employees who were put off making a claim because they could not afford the fee might now rush to submit their claim before the time limit passes. 

Fees were also introduced with the aim of encouraging early settlement, alongside the introduction of the early conciliation process, and reducing the number of vexatious claims. Removing fees could result in an increase in the number of spurious claims made as people can lodge a claim without any evidence to support their case. Without advice, employers might feel they have to pay to settle rather than go to tribunal. The early conciliation process, if this remains, and advice on the possibility of success at tribunal will be important to stamp out future spurious claims. 

Employers need to ensure they are not only taking legal advice at tribunal, but are also taking steps to prevent them being taken to tribunal initially. Providing the right documents, having policies in place and following correct practices will reduce the likelihood of facing a claim. The reputational damage of ending up in front of an employment tribunal has become greater due to the introduction of decisions being published online. This lets anyone view the decision and the scrutiny of business practices normally carried out by a tribunal. Taking steps to prevent unlawful treatment in the business will reduce the many risks of going before a tribunal.

Peter Done is managing director of law firm Peninsula 

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