Employment Tribunal Fees Ruled Unlawful: What does it mean in practice?

01 Aug 2017

The Supreme Court decision last week that the fee regime introduced in 2013 for Employment Tribunal claims was unlawful has gained quite a bit of attention. While there are some interesting technical points for lawyers and civil servants, most employers will want to know what it means in practice.


Q       We reimbursed fees as part of the settlement of a claim brought by a former employee – can we recover those?

The position is not yet clear. While in theory a Claimant will be able to recover fees paid to start a Claim, unless the settlement clearly identified the level of fees which was allocated as part of the settlement, it is highly unlikely that these will be recoverable in practice.


Q       The fee regime has reduced the number of speculative claims by employees; this feels like a regressive step. What can the Government do?

It is certainly open to the Government to introduce a new fee regime, but there are a number of aspects which it will need to consider if it is to avoid falling foul of what is a clear and detailed judgment of the highest UK court. For instance, when setting the new level of fees (and any scheme of remission) it will be important that this is done so as not to preclude or discourage people from bringing claims purely on a financial basis. The Supreme Court also gave a clear view that it is not legitimate for Government to seek to have the Employment Tribunal operate on a ‘self-funded’ basis; the effective operation of the system was a benefit to the public as a whole, and not just the parties to litigation.


Q       Is the current position a charter for ‘ambulance chasers’?

It is possible that when the position is a little clearer about how to reclaim fees that there will be some targeted marketing. However, the number of individuals who have paid fees, and the amounts involved make it unlikely that there will be a claims industry of the type around PPI claims.


Q       But surely we won’t face claims from those dismissed as long ago as 2013?

It is technically possible that such claims might proceed (assuming of course that they aren’t already subject to a valid Settlement Agreement). However, depending on the claim being asserted a Claimant will have to be able to satisfy a Tribunal either that it ‘was not reasonably practicable’ for the Claim to have been brought within the relevant time period, or that it is ‘just and equitable’ for the limitation period to be extended.  While it is anticipated that Employment Tribunals will be fairly sympathetic to those arguments, there will not be an open door.


Q       How soon will a new fee regime be introduced?

There is no clear Government position on this at the moment. Bearing in mind the Summer recess it will be the Autumn at the earliest before there is a clear position on this.


Q       What steps should our HR team take?

With the fall in ET claims some employers have perhaps become a little less concerned about the possibility of ET litigation. The Supreme Court’s judgment is likely to encourage some employees to be more willing to threaten litigation. The ACAS Early Conciliation process remains intact, and will perhaps be viewed more constructively by some employers, given that the prospective Claimant no longer faces the financial fee hurdle should they want to bring a claim.


If any employees have left employment in difficult circumstances since 2013, it may be sensible to check what paperwork has been retained to make sure that relevant documents are not destroyed just in case. An early warning sign to employers may be ‘out of the blue’ Subject Access Requests from former employees.


For further information on Employment Tribunal Fees please contact our Employment team.

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