Employment Tribunal Fees: another fine mess

Have you faced any employment tribunal claims in the past 4 years?  Be prepared for chaos as Supreme Court rules that all fees paid since July 2013 are to be refunded

You may have read a few weeks back that the Supreme Court ruled the system of charging fees for claimants to pursue claims at the Employment Tribunal was ruled unlawful.

The fees order that underpinned the whole scheme was deemed illegal and quashed, meaning that all fees that had been paid by claimants since the system was introduced would have to be refunded. Until such time as the Government introduces a new fee scheme, there is currently no fee for issuing or pursuing a claim at the Employment Tribunal. This has a number of implications for employers.

Enormous headache to find a workable solution

The Government now has an enormous headache in trying to find a workable solution to refund all those claimants that submitted claims and paid the fee. This isn’t as straightforward as it might sound because some of those claimants may have subsequently won their case and been awarded the Tribunal fees back or they reached agreement with their employers and also received payment.

This causes a significant problem for employers for similar reasons. There will be those employers who reached agreement with former employees or against whom compensation was awarded after they lost at Tribunal and they will now be wondering whether they can recover the cost of those Tribunal fees from their former employees. Again this will not be a simple or straightforward exercise.

Potential for late claims from employees who could not afford fees

Perhaps most worryingly for employers, there is the potential for late claims to be submitted by employees who, but for the existence of Tribunal fees would have submitted claims at any time since 2013 and who now wish to do so now that the bar of the fees has been removed. This is potentially a very significant issue as the Tribunals will have to deal with claims out of time, which will be made presumably on the basis that the employees will argue it was not reasonably practicable for them to issue proceedings because they could not afford to do so.

Surge in number of new claims?

Finally, it also means that there may well be an increase in the number of claims that are submitted to the Employment Tribunal for disputes arising now. It is quite clear from the fees regime that it did discourage claims, particularly for low value disputes such as unpaid wages and other unlawful deductions. There may well be an upsurge in those claims now and if unscrupulous employers relied upon the existence of the fees regime to shield them from their bad behaviour, that may now all change.

We shall have to wait and see. All we can say at the moment is that the situation is a mess and there is no simple solution.