• International Workplace
  • 1 August 2017

ET fees ruled unlawful

In a landmark ruling from the Supreme Court, fees for those bringing Employment Tribunal claims have been ruled unlawful, and the Government will now have to repay up to £32m to claimants who have had been charged to take their case to court.

July 2013 saw the introduction of a fees system regarding any claim made to an Employment Tribunal, this fiercely fought at the time by a variety of unions across the UK. Anyone in England, Scotland and Wales wanting to pursue a case against their employer has had to pay as much as £1,200.

Four years on, last week saw a ground-breaking outcome from the Supreme Court that found the fee system unlawful; further it added that the Government had acted unlawfully and unconstitutionally back in 2013 when the scheme was introduced.

The seven Supreme Court judges are reported to have ridiculed the Government’s misunderstanding of “elementary economics, and plain common sense”, when it claimed higher fees would mean increased demand.

The judges also said fees were set so high, it “has had a deterrent effect upon discrimination claims, among others”, and also put off more genuine cases than the so-called vexatious claims the Government claimed fees were meant to deter. 

Unison, which brought the legal action against the fees system, is delighted with the outcome, stating:

“This is probably the biggest victory in employment rights in this country. The Government is not above the law. 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.”

Speaking after the court’s finding, David Isaac, Chair of the Equality and Human Rights Commission, which presented legal arguments during the case, called for the Government to think again. He said:

"The right to justice must be based on the merit of your case, not your ability to pay. Thousands may have been denied of this right and priced out of getting justice. The judgment of the Supreme Court is a damning verdict on the current regime. It is a licence to discriminate for employers and must be scrapped. The law only works if people know that it is a fair and just system and the biggest and strongest will not always win."

Since the introduction of the Tribunal fees system there has been a significant drop in cases being taken to Tribunal. According to EHRC, discrimination cases on the grounds of sex, disability and race, as well as equal pay claims, all fell by around 50% in 2016 to 2017 compared to the last year before fees. Pregnancy and maternity discrimination claims have also fallen by 45%.

Now the fees system has been declared unlawful this will no doubt have an impact on employees, ex-employees and employers as they look at the employment rights and any litigation that follows.

Tar Tumber, HR Consultant for International Workplace comments:

“This u-turn of events is likely to see a steep increase in the number of Tribunal applications being submitted by disgruntled employees (and workers) against employers going forward. 

“The introduction of the fees, back in 2013, was a bit of a double edged sword – whilst the fees reduced the likelihood of vexatious and malicious Tribunal claims being made by people ‘trying it on’, they did mean that staff who were actually mistreated or discriminated against didn’t always get the justice they deserved.  I can imagine having to pay out over £1,000 to seek ‘justice’ would be huge blocker if you’ve just lost your job! 

“The fact that staff can now go through ACAS early conciliation, and then lodge their claim at ET, without having to pay out for this, will no doubt lead to more claims being raised. 

“Therefore, it is even more important that employers ensure they follow due process when managing staff, and train their managers in employment procedures. Whilst this might not prevent claims from being made, it may mean the difference between winning or losing, and certainly should help reduce any compensatory payouts that are ordered.”