Abolition of Employment Tribunal Issue and Hearing Fees

When employment tribunal fees were introduced in 2013 many employment law solicitors and barristers worried that claimants would be discouraged from bringing valid claims. In an erudite and persuasive judgment the Supreme Court explained how the fee regime that was introduced had the unjustified impact of dramatically reducing the number of tribunal claims, especially lower value claims. In particular the court said the government was wrong to believe that only the users of the employment tribunal service benefited and that it provided no broader social benefit. The court stressed the importance of the rule of law and the need for open justice. In relation to employment, individuals need to know that they can enforce their rights if they have to, and businesses need to know that there is likely to be a remedy against them if they fail to meet their obligations. Tribunal claims enable legislation to have the deterrent effect that Parliament intended, as well as providing authoritative guidance as to the meaning and application of employment law.

The Supreme Court was happy that the Government’s original objectives behind the introduction of fees of transferring the cost burden to users of the tribunals, incentivising earlier settlement and discouraging weak or vexatious claims were legitimate. However, the fees introduced were too high and could not be objectively justified, especially given the sharp fall in tribunal claims since 2013. On the evidence, it was obvious that the fall was directly caused by the introduction of fees that proved unaffordable for many. Where households on low to middle incomes could pay fees only by sacrificing ordinary and reasonable expenditure for substantial periods of time the fees could not be regarded as affordable, despite the Government’s best efforts to argue otherwise! The court explained that the fees had been set at too high a level and it had not been shown that lower fees, or a more generous remission system, would have been any less effective in meeting the above objectives.

The court also held that the fees were indirectly discriminatory.

Government immediately accepted the decision and is currently in the process of introducing a system for reimbursing all fees paid to date by claimants and respondents. We will publish details once they are known.

The above decision was momentous and was the most important employment law case for many years. The Supreme Court clearly and firmly reminded the Government of the great importance that must be placed on the rule of law and the need to maintain accessible and open justice. This decision will have a far wider impact than just on employment law cases; where access to justice is blocked, society loses out. With employment rights, where barriers are erected that prevent workers from enforcing their rights, such rights are effectively worthless, and where employers know that claimants are unwilling to bring claims, the whole system of employment protection is undermined to the detriment of everyone.

In time, it is expected Government will seek to introduce again tribunal fees but these will be at a much lower level with an improved remission scheme. Fees are probably the best way of reducing the number of weak or unmeritorious claims, but any new fees scheme must avoid making the same mistake of preventing claimants from bringing genuine claims, especially low value claims such as for holiday pay or for notice pay – claims that before the Supreme Court’s decision had all but been wiped out.