Employment Tribunal Fees Quashed - What Next for Employers?

In a comprehensive judgement, quoting legal principles from sources as far back as the Magna Carta, the Supreme Court on Wednesday 26 July quashed the government’s Employment Tribunal fee scheme.  Introduced in 2013, the scheme required Claimants to pay separate issuing and hearing fees when presenting a claim against their employer. Dependant on the type of claim brought, such fees could amount to as much as £1250 per individual case.

Statistical data relied upon by the Supreme Court demonstrated a 70% reduction in the number of claims brought following the introduction of fees. This was far in excess than that originally expected.  Evidence also pointed to fees having a disproportionate effect on certain claim types and particular demographic groups, specifically women.

Following a prior formal commitment, the government must now pay back all fees paid. A number of sources have suggested that this could be in excess of £30 million. Further, as of the 27 July, the Tribunal service is no longer accepting fee payments.

So what now…..

It is yet to be seen what the government will do in response. Fee schemes in principle have not been ruled unlawful, only the specific scheme introduced in 2013. However, part of the judgment dealt with the illegality of using secondary legislation to extinguish rights conferred in primary legislation. Any future scheme would therefore require a primary Act of Parliament to introduce it. Without a parliamentary majority and with pre-election commitments from both Labour and the Lib Dems to scrap Tribunal fees, the government is likely to struggle to pass such legislation.

In the medium term, a rise in the level of new claims can be expected and the immediate wave in litigation could be considerable.

In the long term, much will rely on the government’s actions now. However, given that any new scheme is required to be less onerous than the 2013 one, employers can definitely expect an increase in Employment Tribunal claims moving forward. As such, prudent employers will be ensuring they have proper access to expert employment law and employee relations advice, to address issues as they arise.

MHR offers a range of HR advisory services, aimed at reducing the risk of employment law claims.  Our HR experts are able to offer retained advisory and consultancy services to ensure compliance in employee relations matters and manage the associated risk. Where employers are faced with a claim, MHR offer a fixed fee litigation service. This cost effective solution gives our customers access to experienced employment law litigators to handle the conduct of the case on their behalf. For more information please contact Emma Renke at emma.renke@mhr.co.uk.

Emma Renke

Emma Renke

Emma Renke is Head of HR Services within MHR’s Managed Services department. Emma is a non-practicing barrister of 8 years call who specialises in employment law and has previously represented clients in the Employment Tribunal and County Court on over 300 occasions. Emma’s specialist interests are discrimination, TUPE and HR strategic change.

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