In a shock decision, the Supreme Court have ruled that fees for bringing employment tribunal claims are unlawful and will be removed with immediate effect.

In 2013, the Government introduced fees claiming it would cut the number of weak and malicious cases, although statistics provided by the Government suggest it may have also helped to prevent legitimate cases with 79% fewer cases being brought to tribunal since the fees were introduced.

The decision, following a judicial review application by Unison, holds that the statutory order which introduced the fee system was not a lawful exercise of the Lord Chancellor’s statutory powers, because the requirement to pay tribunal fees unjustifiably interferes with access to justice, frustrates the enforcement of employment rights, and discriminates unlawfully.

While the Supreme Court held that the Lord Chancellor did have legitimate aims in introducing tribunal fees, the fee regime was not a proportionate means of achieving those aims. In fact, the Supreme Court held that for any fees to be lawful they must be reasonably affordable for low or middle income families. The current level of fees meant that claimants would need to restrict their ordinary and reasonable living expenses to afford bringing a claim.

What does this mean for employers?

Until further notice, employment tribunal fees will be null, meaning that the number of employees bringing a claim against their employers is expected to rise dramatically. No longer will they need to balance financial obligations with perceived access to justice, so as an employer you will need to ensure due diligence is undertaken whenever a decision is made which could bring about a case.

On a lighter note, for those employers who have paid fees within the last three years, the Lord Chancellor has given a legally binding promise to refund any tribunal fees, a process which is expected to begin immediately.

Out of time applications

Employment tribunal claims for unfair dismissal or discrimination are subject to strict time limits of three months in most cases, but this judgment could potentially open the floodgates for any employee dismissed in the last three years to bring about a claim.

As the Supreme Court has already held that fees have deterred claimants from seeking access to justice, it is arguable that the tribunal will take this into account when assessing any out of time applications.  All employers need to be aware of this risk and seek advice if they hear from the tribunal in these circumstances.

What next?

If you are unsure what this judgment means for your business please don’t hesitate to contact us for more information. We will be holding a webinar on Tuesday 1st August at 12pm to discuss this decision, please click here to book your place.

We will also be releasing a free podcast where will be discussing the decision in more detail, stay tuned for more information.