An end to tribunal fees

On 26 July, in a ruling that came as quite a surprise for many, the Supreme Court unanimously upheld UNISON’s appeal that employment tribunal fees are unlawful. This means that the current fee regime will be scrapped, although this doesn’t mean that there will not be a new fee regime put in place following a public consultation by the Government. If there is a new fee structure implemented in the future, it is likely to be more proportionate, and will hopefully not impede employees’ access to justice.

The Government has said that it will take immediate steps to stop charging fees in employment tribunals and make arrangements to refund those individuals who have paid fees since their introduction. According to the trade union UNISON – who brought the case and hailed the judgment as ‘a major victory for employees everywhere’ – the fee refunds that the Government will have to pay out to thousands of people could amount to as much as £27 million.

A consensus for change

The CIPD welcomes this ruling and has consistently called for a full public consultation to review the fee regime, first introduced in July 2013. After the Supreme Court judgment, we polled almost 1,500 HR professionals and asked them whether they agreed with it. Well over half (57%) said they agreed or strongly agreed, compared with 36% who disagreed or strongly disagreed with it. A similar view emerged from research we published in May this year in partnership with law firm Lewis Silkin; the survey of 508 employers revealed that the majority of respondents were in favour of a fundamental change to the current fee system.

Many other employment organisations, legal and professional bodies and other special interest groups have also questioned the high level of fees charged for some types of claims (£1,200 for a type B claim). The Government would have benefitted from listening more closely to the expert views and evidence put forward by these organisations that span the employment spectrum and have not been restricted to the voice of trade unions. In June 2016, a report by the House of Commons’ Justice Committee concluded that, while the Committee had no objection to the principle of charging fees to court users, it asked the important question ‘what is an acceptable amount to charge, taking into account the need to preserve access to justice?’ It called for major changes to ‘restore an acceptable level of access to the employment tribunals system’. It seems that this was not heeded by the Government.

The CIPD voiced its concerns again in our response to a recent Government consultation on the fee regime, which chose to narrowly focus on the fee remission aspect of the regime. We expressed concern that the key proposal, to raise the gross monthly income threshold for fee remission from £1,085 to £1,250, would not be enough to enable individuals with a genuine case to access the employment tribunal system.

The staggering drop over more than 70% in the number of claims since their introduction strongly suggests that the fee regime has affected some people’s access to justice. It’s inevitable that some perfectly valid claims have been discouraged as a result of the fees. This point is central to the Supreme Court’s judgment, stating that the ‘Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice. Since it had that effect as soon as it was made, it was therefore unlawful and must be quashed.’ The ruling goes on to assert that whether or not fees prevent access to justice ‘must be decided according to the likely impact of the fees on behaviour in the real world’, and that access to justice is prevented if someone feels they can’t bring a claim ‘unless he can be virtually certain he will succeed.’

The Court also ruled that the fee system is indirectly discriminatory under the Equality Act 2010 because higher fees are charged for types of claim that include discrimination claims, because a higher proportion of women bring discrimination claims and so are placed at a particular disadvantage.

What should employers do next?

There is now speculation that the number of employment tribunal claims will rise sharply. As there will now be a consultation on the fee regime, which could still involve some level of fee paid, we can’t predict with any certainty exactly what will transpire in respect of future claims. However, if people’s access to justice is restored, it is quite likely that the number of claims could increase. This will have an inevitable impact on the work of the tribunal service, Acas – and, of course, employers if they face a rise in tribunal claims.

Regardless of fees, the best approach to resolving individual disputes at work is to promote the use of informal conflict resolution methods like mediation, to help nip potential conflict in the bud. If a case does proceed to tribunal, relationships are likely to have broken down beyond repair so it’s essential that organisations have in place good people management policies and practices, and nurture healthy working relationships.

Employers should train line managers in how to manage people and encourage an open and collaborative management style. There should be clear policies and procedures in place for managing employee complaints and grievances, and positive promotion of equality and diversity values backed up by a culture of mutual respect and tolerance. Employees should be clear of the behaviour and standards expected of them at work, and have the ability to seek redress or raise an issue of concern if they feel they have been unfairly treated or their employment rights not recognised. Hopefully, informal approaches and an open dialogue will resolve most individual employment differences.