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.
So, the obvious question now is ‘are employees now free to bring Employment Tribunal cases relating to matters from 2013 onwards’? The likely answer? Yes, but only in certain circumstances.
Whilst the circumstances aren’t known at present, it is likely that cases will only be granted time extensions in the following circumstances:
(1) Where the individual contacted Acas for a period of Early Conciliation; and
(a) Where cases have previously been thrown out for non-payment of Tribunal fees;
(b) Where cases have been previously withdrawn following a failed application for a fee remission; or
(c) Where an individual can show that they were unable to afford Tribunal fees (yet didn’t qualify for a fee remission under the fee remission system rules at that time). This is likely to be a controversial area and down to the discreton of Tribunal judges who, I predict, will be asking themselves the question: “Did the Tribunal fee system foreseeably prevent the individual from lodging a Tribunal claim?” It is likely that this limb will be a difficult one to pass in practice.
However, I believe the above tests will only be the ‘first hurdle’ because a tribunal judge will also have to decide whether it is “just and equitable” in all other circumstances to allow the application for an extension of time. This will include considerations of the practical and financial impact on the employer of the lapse in time, including evidential difficulties caused by key employees and/or witnesses having left in the interim and now being unavailable.
Tribunals will also be extremely conscious of avoiding an ‘opening of the floodgates’ on every post-2013 case and, instead, will want to ensure that only those employees actively prevented from bringing a Tribunal claim on financial grounds can obtain an extension of time. How it does so, only time can tell.
But, in the meantime, it is fair to say that the effects of the ‘unlawful’ tribunal fee judgment in R (on the application of Unison) v Lord Chancellor will rumble on for some time to come.