Supreme Court rules employment tribunal fees regime is unlawful

On 26 July 2017, the Supreme Court quashed the fees regime in employment tribunals, declaring its unlawfulness from the outset. The Ministry of Justice estimates that once complete, the reimbursement of fees will amount to approximately £33m.

However, the implications of this decision go far wider than government finances as employment tribunals will now offer claimants whose claims were rejected due to non-payment of fees, the opportunity to have their cases relisted. The Ministry of Justice estimates there are around 7,500 claims that have been rejected on the basis of non-payment of fees.

Given that fees were first introduced in July 2013, this could therefore mean that employers are faced with having to defend claims that are several years out of date, where records are no longer available and employees who were involved in the matter are no longer working for them.

In cases where prospective claimants were deterred from bringing claims due to the now declared unlawful fees regime, they will be entitled to submit their claims in the usual way attaching an application for an extension of time for their claims to be accepted. This request will be determined as per the normal rules:

  • For cases of unfair dismissal, failure to comply with collective consultation requirements and failure to consult with appropriate representative on a TUPE transfer, the decision to extend the time limit will be the more stringent "reasonably practicable" test in respect of whether it was possible to bring the claim within the 3-month time limit.
  • In cases of discrimination, the test will be whether it is "just and equitable" to allow the claimant to bring their claim. This will rely heavily on whether the claimant has brought the claim promptly following news of the abolishment of the fees regime.

It has already been reported that the volume of new claims has increased rapidly since the abolishment of the fees regime, with Bristol and Watford Tribunals boasting an increase in claims of 300%. It is yet to be determined how many of these are claims from claimants previously dissuaded from bringing their claims as a result of the fees regime.

Owing to the financial cuts that were made to the judiciary following the introduction of fees resulting in heavy reductions in staffing, current trends unsurprisingly suggest that employment tribunals will take longer to deal with applications and correspondence as workloads soar. The knock-on effect of such trends is that the timetabling of cases for preliminary hearings and final hearings is likely to be severely delayed with listing of final hearing estimated to be up to 9 months after the preliminary hearing. This in turn is predicted to encourage settlement of claims that would not previously have been expected to settle as parties decide they do not want a hearing looming over them for such length of time.

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