Will the abolition of Employment Tribunal fees result in ‘old’ 2013-2017 cases being permitted in Tribunal?

Employment Tribunal fees are illegal. This was declared on 26th July 2017 by the Supreme Court in R (on the application of Unison) v Lord Chancellor. Put simply, from that day onwards, Employment Tribunals completely scrapped both issue fees (the fee for submitting a claim form to Tribunal) and the hearing fee (the fee incurred 3 weeks before a final hearing date) due to their illegality.

Unfortunately, however, it’s not that simple. This is because tribunal fees were ruled to be ‘unlawful’. This means that all previously obtained Tribunal fees from the introduction of the fees in 2013 onwards were illegally obtained and must be paid back. Now, whilst that sounds simple, in reality, it’s far from it.

Why? Well, to start with, employees bringing group actions through one main claimant paid a combined fee. So, how do you handle returning a split fee to each applicant (particularly in situations where some settled and others continued to final hearing)? Also, many COT3 (ACAS brokered) agreements (the legal document by which parties agree to settle claims) provided for employers to repay the equivalent of the employee’s tribunal fees to the employee on top of their separate settlement amounts; do those employers now have the right to claim that portion back from Her Majesty’s Courts and Tribunals Service (HMCTS) upon simply producing the relevant paperwork?

The only comment from HMCTS so far is that a system for reimbursing fees will be announced soon, hopefully by September. Until that date, there is uncertainty as to what will happen.

The biggest question, however, is what happens to the claims of employees who would have brought a claim but who were put off by the tribunal fees. It is undeniable that thousands of employees acted in this way – in this case the statistics don’t lie, namely that there was an appropriate 70% drop in Tribunal claims following the introducton of tribunal fees.

Usually, employees have a three month time limit in which to contact ACAS and then, allowing for time spent during ACAS Early Conciliation, issue a claim to Tribunal. However, many solicitors believe that the ‘unlawfulness’ of the Tribunal fees opens the door to former prospective claimants to bring post-2013 claims. Is this true?
The honest answer is ‘nobody really knows’ and, eventually, this question will be decided by tribunal judges.
One of the reasons this question hasn’t been effectively answered yet is partly due to the President of the Employment Tribunals issuing a universal stay on all claims linked to the ‘unlawful’ Tribunal fees judgment. This has, so far, prevented claims to tribunals asking this question.

However, one case, that of Dhami v Tesco Stores Ltd, slipped through the net. It did so because the case also included confusion over the effective date of termination by Tesco (which took it outside the stay imposed by the President of the Employment Tribunals).

In the Dhami case, the Claimant brought claims for disability and age discrimination against Tesco. However, her case was previously thrown out for non-payment of Tribunal fees due to her application for a fee remission being rejected. In the recent hearing, the Tribunal allowed her application for an extension of time in which to bring her case. Put simply, the Tribunal agreed that it was “just and equitable” (the legal test for extensions of time in employment tribunals) to do so in light of her case having been rejected due to unlawfully applied fees.

Applying for fee remission

While we have employment tribunal fees one of the practical issues which has undoubtedly presented problems has been the procedure for applying for fee remissions. Back in July 2013 I highlighted the problems that have beset the fee remission procedure in the county courts and wondered whether the same problems would arise in employment tribunals. However, whereas the problem in the county courts has been a slack procedure, quite the opposite has been apparent in the employment tribunals. The application procedure for fee remission has been rigorously applied and the online procedure requires payment of the fee or a remission application. The remission application form is incorporated within 31 pages of detailed guidance which confirms, critically, that the application must be supported by evidence such as a letter from a Job Centre Plus or the DWP or evidence of income such as three months’ bank statements. What if there is a delay in obtaining that evidence, particularly taking into account the strict three months’ time limit for most employment tribunal applications?

Rule 11(1) of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2013 provides that “The Tribunal shall reject a claim if it is not accompanied by a Tribunal fee or a remission application”.

As pointed out by Mr Justice Langstaff in the recent Employment Appeal Tribunal case of Deangate Limited -v- Hatley, Patterson and Kurtz “shall” is mandatory and there is therefore no room for the exercise of discretion. Deangate’s former employees submitted their applications online one day before the expiry of the time limit for claiming. However the applications were not “accompanied” by the fees or remission applications. Accordingly the employer contended that they should have been rejected. Had they been resubmitted each with the fee or a remission application they would have been out of time so that the tribunal would have no jurisdiction to deal with them.

However, the claims were accepted. Deangate Ltd complained and the matter was heard by Employment Judge Ferguson sitting in Colchester. She found that the claims had in fact been accompanied by remission applications or, in the alternative, pursuant to Rule 6 of the Rules of Procedure she had the power to correct any “irregularities and non-compliance with the Rules”. Each of the claimants had written in the section headed “Additional information” in the claim form ” “I have sent my application for fee remission by post”. The claim forms were submitted online on 13 February 2014 and the fee remission applications were sent by special delivery on 18 February, arriving on 19 February. The judge noted that the applications could not be submitted online because original documentation was required. The judge took the view that “it is a permissible interpretation of Rule 11 to treat remission applications made in this way as “accompanying” a claim form submitted earlier online”.

There is a common sense problem here concerning the meaning of “accompanied”. When first considered in the Employment Appeal Tribunal it was put this way:
This appeal throws up the meaning of “accompanied” in Rule 11(1).  It is an ordinary English word; and it is not immediately obvious that a fee payment or application for remission made 6 or 7 days later “accompanies” an application made 6 or 7 days earlier.  An analogy might be the 11 year old who turns up to the cinema alone, to see a film with a certificate which requires him to be “accompanied” by an adult if under 12 and asks to be let in on the basis his Dad will turn up two to three hours later… if similarly entry to the ET system has in law to be denied unless and until accompanied, by the time the fee application for remission can be matched with the ET1, the latter may be too late; the question is thus jurisdiction, since the ET has no discretion but to reject an unaccompanied ET1, and it was plainly reasonably practicable to put the ET1 in on time since (but for the fee payment) that was done… Rule 6 may not provide the escape route from these consequences which the Judge thought, though this is arguable: can an absence of jurisdiction be waived in the way suggested?
Since many claims had been accepted in the same way the Secretary of State for Justice intervened in the appeal.

fee remissions in courts and tribunals

It’s all very well introducing fees across more courts and tribunals in an effort to keep unmeritorious claims away, but there is always the risk of “throwing the baby out with the bath water”. What about the deserving cases of those who simply cannot afford the fees? Legal Aid is less and less likely to be of any assistance – assuming, of course, it is even available for a particular jurisdiction in the first place.
So, having got the bit between its teeth on Employment Tribunal fees, with their complex fee remission arrangements, the Government has decided to look more widely at the whole question of the remission of fees. Various systems have been implemented over time across the whole range of courts and tribunals, and standardisation is now the name of the game.
Accordingly, the Ministry of Justice has launched a consultation on proposals for a single system of fee remissions (waivers) for all fee paying courts and tribunals.
The main changes being proposed include:

Introducing a capital test – at the moment there is no capital test so people with low income but large capital don’t have to pay towards court and tribunal fees, meaning the taxpayer picks up the cost;
Ensuring those who can afford to make a contribution to fees do so – the proposals will mean more contributions from those who can afford it and an income cap to stop high earners receiving remissions;
Making the remission system simpler – bringing in one unified system to cover the whole of the courts and tribunal system, replacing the complicated current arrangements, and calculating fee remissions using monthly salary figures rather than annual salaries so users have more accessible evidence;
Full fees remission for people on specific benefits – ensuring access to justice is maintained for those who cannot afford to pay a contribution to a civil court or tribunal fee.

when criticism becomes apparent bias

Tribunal judges have the power and are encouraged to deal robustly with weak and vexatious claims (or indeed defences – sauce for the goose…), and in doing so are likely to be critical of the conduct of the case by the party in question. However, they must take care not to overstep the mark and appear to prejudge other issues – for example an award of costs. In Oni v NHS Leicester, the tribunal dismissed a nurse’s claims of constructive unfair dismissal, race discrimination and victimisation after a long hearing and commented that both the claims and the way in which they had been conducted were unreasonable. In particular they said she was an unreliable witness and her answers to questions were evasive and equivocal. An application was made for costs against her; she argued that the same tribunal should not consider the question of costs, on the ground of bias, but the tribunal declined to step down. The matter went to the Employment Appeal Tribunal who accepted that while there was no actual bias, the views expressed about the case’s weakness meant that there was apparent bias and so costs should be considered by a differently constituted tribunal. While tribunals are entitled to comment on the conduct of claims before them, they should be careful not to go too far and indicate what view they would take on a costs application.
A further point which arose from the case was that when considering costs the tribunal had not taken any account of the claimant’s ability to pay an award of costs. This is a factor which should always be taken into account – and it was suggested that tribunals could usefully direct the use of county court form EX140 to establish the losing party’s financial circumstances.
This case is particularly timely because, taking into account the Government’s proposed reforms, we can expect to see a significant increase in the number of costs awards made, as well as the "weeding out" of unmeritorious claims.