In the most significant judgement in employment law for more than a generation, the Supreme Court has ruled that the imposition of Tribunal Fees was unlawful. The effect of the surprising judgment is that the requirement to pay a fee to bring a claim has been abolished with immediate effect. Not only is it now “free” to pursue a claim, but anyone who has paid a fee is entitled to a refund which could end up costing the government in excess of £30 million.
While the decision is surprising given the Court’s previous decision when the matter was last tested, it has to be the right one. It cannot be right that an individual would have to pay £390 to pursue a claim for say £400 in lost wages. Should individuals be required to pay something - in my opinion yes they should. However, the amount they are required to pay has to be proportionate to the amount they are attempting to recover.
The imposition of fees saw the number of claims issued drop by around 70% and it was against this background that the fees were challenged and eventually abolished. I certainly witnessed a significant drop in the number of individuals wishing to pursue claims. While this was welcome news for many of my employer clients, a balance has to be struck between ensuring there is not a barrier to justice for those who have been genuinely wronged and the interests of employers. One theory was that the imposition of fees would see a drop in unmeritorious claims, but this was certainly not my experience, and there was no evidence of this occurring. The truth is that those who were determined to bring a claim “come what may” were unlikely to be put off by the fees.
The worse effected were those with claims for relatively small sums of wages. Unscrupulous employers were in the position of being able to gamble on not paying employees their final weeks or months wages once the employee was leaving. Most employees faced with this problem were put off paying the £390 and employers would get away with it. It is this category of employee that stands to benefit the most from the ruling.
Do I believe this will see an “opening of the flood gates” – no. Do I think it will see an increase in the number of claims issued – yes. Was it the right decision – yes definitely. What is not clear is what will happen next. I expect fees will return, and I do not disagree with requiring an employee to pay to bring a claim (they get it back if they win). However, that fee must be proportionate to the value of the claim and the fees should not be so prohibitive that they dissuade those with genuine claims from having their case heard.
For further information
James Twine
Head of Employment