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The Terms and Effect of the Abolishment of Tribunal Fees

On 26 July 2017, the Supreme Court gave its decision on the abolishment of employment tribunal fees, deeming it unlawful because it prevented access to justice.

As a result, Employment Tribunals across the UK immediately stopped accepting fees for presenting claims against unfair dismissal and other employment-related issues.

According to the MoJ, the number of single claims brought between July and September 2017 increased by 64 percent. Additionally, the number of unfair dismissal claims also witnessed a significant increase in number, with 836 claims being brought in July 2017 followed by 1,915 in August 2017. These statistics clearly demonstrate the effect of the abolition of Employment Tribunal fees.

Why Were Tribunal Fees Introduced?

In the UK, tribunal Fees came into effect from July 2013, in order to solve a number of issues including the increasing burden of the cost being placed by the tribunals on the government purse. In 2013, the employment tribunal system was the only court enforcement system, which didn’t have any user fee.

The fees were also introduced to weed out vexatious and spurious claims from claimants, whose main intention was to cause a nuisance.

In order to do this, the government decided to set the fees high and divide them into two categories of Type A claims (for less time-consuming claims like unpaid wages), which would cost £390 and type B claims (for claims relating to unfair dismissal or discrimination), which could cost up to £1200.

How Did the Legal Change Come About?

UNISON lodged a judicial review in front of the Supreme Court, on the basis that by charging a tribunal claim fees, a huge proportion of the population was denied access to justice.

Furthermore, it claimed that certain sections of the population were disproportionately affected. Female professionals, for example, tend to earn less than their male colleagues and would be affected more by the scheme. This implies that tribunal fees indirectly discriminatory on the basis of sex.

UNISON was unable to produce sufficient evidence in multiple hearings. Despite that, UNISON succeeded in its attempts when the Supreme Court gave its ruling that the fees were set at a level that definitely restricted access to justice and was discriminatory against women and individuals with protected characteristics.

What Does This Mean For Employers?

While abolishing employment tribunal claim fees will surely increase the number of claims being made, potential claimants will now have to undergo early conciliation under ACAS before they can represent themselves in front of the tribunal. This may continue to weed out quite a few of the vexatious claims.

Further, claims that are made exclusively by females, for instance maternity and pregnancy discrimination claims, and others against less favourable treatments, may increase. Therefore, employers will have to adopt certain practices in light of the increased likelihood of both valid and vexatious claims.

As a result, employers will have to make sure that they are aware of their employment law responsibilities in respect of, minimum pay rates, contractual entitlements and processes dealing with statutory rights.

The abolition of fees may also result in an increase in the number of no win no fee employment solicitors arguing cases from the perspective of time limits.

Earlier, claimants usually had three months less one day, starting from the time of dismissal, to make an employment tribunal claim. However, a judge may decide to extend the time limit if they found that it wasn’t “reasonably practicable” for the claim to be presented within the normal time restrictions, especially in circumstances when the claimant was unable to pay a fee.

Additionally, the government has also initiated a refund of any fee paid since July 2013. This applies to all fees paid by both claimants and respondents. This could be a tricky administrative exercise for employers because those who were unsuccessful in defending a claim will now have to reimburse the claimant for their initial expenses.

What Will be the Overall Effect on the Employment Tribunal System?

The abolition of tribunal fees is expected to have a dramatic impact on the employment tribunal system. Over the last four years, there was a significant drop in the number of the employment tribunal claims because of the hefty fees and employees simply not being able to afford to pay them.

This, in turn, meant that the system was stripped of many of its resources. For example, many tribunal judges decided to retire or move on because of fewer claims. However, with the removal of the fees, it now means employment tribunals are set to face a difficult phase, due to the dramatic increase in the number of claims and fewer judges to hear them.