Employment tribunal fees ruled unlawful

Today, in a landmark victory for Unison, the Supreme Court has ruled that Employment Tribunal (ET) fees are unlawful, because they impose unjustified limitations on the ability of workers to enforce their statutory employment rights under UK and EU law.

Fees in the ET are significantly higher than in the small claims court, despite the fact that the value of damages claimed can be similar in both forums. ET fees can usually be recovered from the respondent if the claim is successful, but the need for initial funding of up to £1,200 for fees, often when the claimant is unemployed, has resulted in a dramatic fall in ET claims being brought.

According to the latest HMCTS employment tribunal statistics (for the quarter ending March 2017) new ET claims have remained stubbornly low at around 4000 per quarter, since April 2014.  ET claims fell by 79% after the introduction of ET fees.

The fees regime will now need to be urgently reviewed and either formally abolished or brought more in line with the civil courts fees regime, following new legislation. In the meantime, justice minister Dominc Raab is reported as confirming that the ET will cease taking fees from claimants “immediately”. The Supreme Court has also ordered that all ET fees paid to date must be refunded, including those where the fee was eventually repaid to a claimant by an unsuccessful respondent.

Businesses of all sizes should brace themselves for a possible hike in the number of ET claims against them in the coming months. Debenhams Ottaway can help businesses to arrange protection against the cost of future employment claims, and we will carefully monitor and report further on any procedures put in place by the government to enable recovery of ET fees already paid.