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Martin Mensah - The end of Employment Tribunal Fees, for now...

06/10/17

MM

In July, the Supreme Court concluded that Employment Tribunal fees were unlawful and at the time of writing, we are told that the process of refunding Claimants (and Respondents who repaid successful Claimants) is underway. Instituting an unfair dismissal claim will no longer require shelling out £1,200.00 to see it to its conclusion.

 

The beauty for Respondents was that they could sit on their hands and wait to see if the Claimant would "put his money where his mouth was." This potentially allowed unscrupulous employers to ride roughshod over their workers knowing that the likelihood of facing legal redress was minimal. Some Respondents probably adopted a riskier approach to some dismissals knowing that the impediment of fees was in their favour.

 

Whilst fees were seen by some as a disastrous blunt instrument to disincentivise vexatious Claimants, they were part of a package of reforms and the Coalition Government (as it was) should be congratulated for the move toward ACAS early conciliation - a process where parties were required to attempt to enter discussions before proceeding to a hearing.

This is the oft-forgotten element of the 2013 reforms and indeed some Respondents consider that the extra layer of bureaucracy provided by ACAS early conciliation also acted as a barrier to a putative Claimant - the additional hurdle of receiving an early conciliation certificate serving to provide pause for thought before pursuing a claim.

Respondents fears that the judgment will lead to a return to pre-2013 levels are likely to be unfounded because of the mandatory scheme which will still serve to encourage parties to settle claims before litigation. This should also serve to continue to deter vexatious Claimants.

 

Part of the rationale for the introduction of fees was to transfer the cost burden of the Tribunals from taxpayers to Tribunal users. However, that was always erroneous - the taxpayer consistently had to make up the shortfall for the efficient running of the Tribunal administration.

There is also little evidence that another stated aim of the regime - to deter vexatious claims- has succeeded. The success rate of tribunal claims has fallen since fees were introduced, suggesting that in fact, genuine cases have been deterred at least as much as those without merit.

Some argue that the reality was that they were a partly political device to put workers in their place and curry favour with employers.

 

Whilst the decision was greeted with great acclaim, I am concerned that the Government, even though it is beset by broader and more pressing issues, will be loath to allow the current position to persist. The Government could now adopt a position whereby fee levels are dramatically reduced but still enough to disincentivise Claimants. This was effectively referenced in the judgment of Lord Reed at paragraphs 86 and 87:

"Fees paid by litigants can, in principle, reasonably be considered to be a justifiable way of making resources available for the justice system and so securing access to justice. Measures that deter the bringing of frivolous and vexatious cases can also increase the efficiency of the justice system and overall access to justice."

"The Lord Chancellor cannot, however, lawfully impose whatever fees he choosesin order to achieve those purposes. It follows from the authorities cited that the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice."

In essence, the Supreme Court has said that for the fees to be lawful, they must be set at a level that everyone can afford.

 

It is likely that this government would be keen to introduce a more "proportionate" replacement fees scheme but Brexit as well as the current electoral arithmetic should serve to place a block on any bold or radical legislation.

However, the 70% drop in Tribunal claims since 2013 will have been welcomed by a significant number of Conservative party backers and the potential of a return to the "bad old days" where Claimants were free to institute claims with impunity will not sit well.

There is no suggestion that the government has changed its underlying position on the fees and so at the very least, I expect the proposal for an amended regime with lower fees more in line with those in the county courts which would address the issue of the discriminatory impact of higher fees for discrimination cases.

 

There are manifold issues arising from the judgment including the potential for Claimants to argue that they did not institute a claim because of the fees regime, those cases where a claim was dismissed by virtue of non-payment of Tribunal fees (where fee remission applications were rejected) and whether Tribunal Judges will be willing to agree that it is "just and equitable" to submit discrimination claims out of time or even that it was not "reasonably practicable" to submit an unfair dismissal claim within the time limit because of the fees regime. In order to avoid the floodgates opening to this litigation, it is likely that Tribunals will need solid evidence that the Tribunal fee system actually prevented the lodging of a Tribunal claim.

 

Despite my pessimism about a new fees regime, opening further debate about the future of the Tribunal system and potential changes is welcome.

Maria Miller, Conservative Chair of the Women and Equalities Committee has called for a   change in the time limit from three to six months for pregnant women/new Mothers to institute their claims, on the basis that they have recently experienced significant increases in discrimination at work.

 

Another issue that will rear its head, given that this Government saw fit to introduce alongside the fees, a cap of 52 weeks' pay for a successful Claimant, will be what an unshackled post-Brexit Conservative administration will think about the current uncapped level of compensation for discrimination claims? (only in place post-1994 because of the European Court of Justice judgment in Marshall v Southampton and South West Hampshire Area Health Authority, which enforced European Community Equal Treatment Directive 76/207/EEC)

Fees were a significant win for workers but it is clear that greater battles lie ahead…..

Martin Mensah