Tribunals and tribulations: employers back in the firing line?

Back in July 2013, the government introduced employment tribunal fees for anyone wanting to make a claim or appeal a judgement. The fee to lodge a claim was £160 or £250, depending on the nature of the claim, and the fee to pursue the matter to a final hearing was a further £230 or £950, again dependent on the nature of the claim.

If employees won their claim, the tribunal judge could order the employer to pay any fees incurred.

After the introduction of tribunal fees, the number of claims being brought fell by 80%, but the ratio of claims being successful did not change – so the introduction of fees did little to deter spurious claims. Clearly, some individuals were deterred from making claims due to the cost.

Supreme Court decision

While claim numbers were dropping, unrest in trade unions was growing and one – Unison – decided to challenge the government’s implementation of the fee regime, claiming it was unlawful and indirectly discriminated against women.

This was not, by any means, an easy task, as both the High Court and Court of Appeal rejected the claim. However, at the end of July 2017, The Supreme Court quashed the tribunal fee regime, giving judgement that it was both unlawful and indirectly discriminatory.

The Supreme Court decided the government at the time acted outside its powers when it introduced fees at current levels, because the fees effectively prevent access to justice.

What does this mean?

As a result of the judgement, no further fees can be charged by the employment tribunal unless, and until, a replacement scheme is introduced. This means new claims can now be brought for free again and no hearing fees will be charged for claims already lodged.

As for those who have already paid tribunal fees, the Ministry of Justice has undertaken to reimburse them.

Without the deterrent effect of fees, employers now face an increased risk of employment-related claims from current and former staff. It is also possible some individuals may try to claim they should be permitted to bring out-of-time claims in respect of past alleged breaches of their rights, arguing the now-found-to-be high and unlawful fees prevented them from bringing a claim until now.

The Government may try to act quickly to replace the system quashed by The Supreme Court; however, in light of Brexit, a hectic parliamentary schedule already exists. When a replacement system will be debated and passed is unknown – it could be months or even longer. The Supreme Court ruling gives Parliament a lot of “food for thought”, but, so far, it is unclear what shape a replacement scheme would take.

While a window of opportunity exists to submit a claim without paying a fee, it is likely employees will take it. Claim numbers are expected to rise, but whether they will rise to the levels they were prior to the introduction of tribunal fees is unknown. If they do, it is unlikely the current tribunal system – with a reduced number of hearing centres, judges and clerks – could cope. No doubt, if a new fees regime is introduced and once the media attention has died down, the number of claims will level, but, in the meantime, employers must watch and wait.

Avoiding a tribunal

How can employers protect their businesses from claims being made? In essence, it is important to ensure all employees have up-to-date contracts; that clear and accessible policies exist dealing with discipline, absence and grievances that managers must follow; employees – especially managers – are trained in recognising discrimination in the workplace; and accurate records of all meetings and telephone calls with employees are kept.