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July 2017 Newsletter - “Out of time” employment tribunal claims may now be brought by ex-employees following Supreme Court ruling

Posted on Friday 28th Jul 2017

NEWSLETTER

This Newsletter is entirely devoted to the Supreme Court ruling this week that tribunal fees were unlawful; a decision as surprising as it was momentous. The justices were unanimous in their view that when parliament confers employment rights on individuals, the Lord Chancellor cannot effectively take them away by introducing prohibitively high fees.

 

BACKGROUND

As most clients will be aware since 2013, claimants have had to pay a fee of up to £1,200 to take their employer to a tribunal and the drop of around 70% in the number of claims to tribunal is largely attributable to the introduction of fees.

It is reasonable then to anticipate some increase in tribunal applications and because the abolition of fees is immediate, that could happen very quickly.

 

HOW DID WE GET HERE?

The case of R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51, more commonly known as ‘the appeal against Employment Tribunal fees, was brought by the trade union UNISON who argued that the fees introduced by then Lord Chancellor, Chris Grayling, discriminated against women and other groups of workers. It has been a long road for UNISON whose challenge had been rebuffed previously in the Court of Appeal.

 

WHAT DO WE KNOW NOW?

All fees paid by employees between 2013 will be refunded by the government. This is said to amount to between £27m and £34m. However, the mechanism for reclaiming is not known. The situation is more complicated for employers.

An employer who has been unsuccessful at tribunal is usually called upon to reimburse the claimant for the fees paid. One might take the view that because those fees were unlawful in the first place and the claimant ought not to have paid them, the employer who has refunded them should be able to claim them back. We cannot say that this is the case until further details are provided by the government.

Because fees have significantly reduced the number of ET cases, with consequential costs savings to the public purse, we believe it is unlikely they will be removed entirely. It maybe that employers, will be required to pay a defence fee at the outset as this would answer the justices’ concern that high fees amounted to an “entrance fee” to justice, putting off claimants at a vulnerable time in their life. Additionally claimants may possibly be asked to pay much lower fees to bring an ET claim but nobody knows at this stage.

The second, more serious aspect of the case is that, any employee who might have brought claims between 2013 and 2017, but who was put off by the fees, can now seek permission to bring them ‘out of time’. This will be easier with discrimination cases, because that was the basis of the UNISON challenge, than with unfair dismissal cases. Potentially there could be a large number of such cases brought by ex-employees.

 

WHAT ELSE MIGHT CHANGE?

In 2014 an absolute requirement to go through a period of conciliation was introduced before an individual was permitted to launch a claim in the ET. In 2014/2015 ACAS dealt with 83,000 claimants who commenced this process of early conciliation. The law, of course, could not compel the parties to engage meaningfully in conciliation but the presence of fees in the background might have encouraged them, especially the claimant, to reach a compromise. Now the barrier of ET fees has been removed, individuals may simply want the conciliation process to be concluded, and ask ACAS to issue the certificate. Whether early conciliation can survive in its present form is questionable.

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