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The Abolition of Employment Tribunal Fees: What Happens Next?

02 November 2017

In a landmark decision on 26 July 2017, the Supreme Court abolished fees in the employment tribunal and the EAT.

Employment tribunal fees had previously been introduced in July 2013 and claimants were obliged to pay up to £1,200 if they wished to bring a claim. In consequence the number of employment tribunal claims fell by 70% and the public service union, Unison, challenged the system by means of a judicial review.

The Supreme Court unanimously ruled that the fees were unlawful and represented a disproportionate restriction on access to justice. As a result, fees are no longer payable with immediate effect. However, this relatively unexpected development raises a number of questions for schools regarding employment claims that have been brought (or might have been brought) against them in the past four years.

Can an employee who had to pay a tribunal fee reclaim that fee?

Yes. The Government launched its own reimbursement scheme on 20 October. A pilot implementation of the scheme has started and full roll-out is expected in mid-November 2017. Successful applicants will also receive interest on the fee that they paid at the rate of 0.5%, calculated from the date of the original payment up until the refund date. It is estimated that the total costs to the Government of reimbursement will be £33 million.

Could schools face a backlog of historic claims from employees deterred by the fees regime?

The Government hasn’t issued clear guidance on this point but the prevailing understanding is that delayed (or late) claims will be considered according to the usual rules. This means an employee who felt put off bringing a claim because of fees will need to submit it in the normal way and apply for an extension of time based on the usual tests e.g. the "not reasonably practicable" test applicable in unfair dismissal claims whereby the tribunal will consider whether the claim was presented in a reasonable timeframe following the expiry of the three month time limit. Employees who promptly bring historic claims they can evidence were deterred by fees may well find that these claims are accepted by the tribunal.

It is also likely that employees who brought claims that were rejected because of non-payment of fees will be able to apply for their claim to be reinstated. It is understood that the tribunals are in the process of writing to all such affected employees, asking whether they wish for their claim to be reinstated. There are estimated to be approximately 7,500 such cases.

If a school paid a costs award to an employee for a tribunal fee, can they claim it back?

The Government is yet to clarify this point but the prevailing understanding is that schools that have paid for fees via a costs order will be entitled to apply to the tribunal system for reimbursement, assuming that they can provide evidence both that a costs order was made and that they paid it. It is expected that the position will be become clearer after the first stage of the Government reimbursement scheme has completed around mid-November 2017.

Could fees be reintroduced?

This remains a possibility. Whilst the previous regime was unlawful, a different one that charged significantly less, for example, might not be. However, at the time of writing, there has been no indication that the Government has the appetite to attempt to reintroduce a fees system.

Practical implications for schools

It seems probable that the abolition of fees will result in an increase in the number of new employment-related claims (although whether this will be to the level of claims prior to the fees regime is uncertain).

It is also possible that there will also be an initial surge caused by employees rushing to file claims that were previously not brought due to the financial deterrent of fees. The types of additional claims that are now likely to be brought will probably be ones of relatively low value and those with borderline prospects of success, as these were the ones most filtered out by the fees system.

Finally, the increase in the volume of employment tribunal claims is likely to place further strain on an already overburdened and creaking tribunal system. Current experience indicates tribunals have already become slower to process correspondence and schedule hearings and these problems are likely to continue.

By Adam Taylor

For further advice on the above topics, please call us on 01483 543210 or alternatively email enquiries@barlowrobbins.com

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