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26th July 2017

Supreme Court Rules that Employment Tribunal Fees are unlawful

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In a decision which will have very significant ramifications for both employment and constitutional law, the Supreme Court has this morning ruled that the 2013 Employment Tribunal Fees Order (‘the Order’) is unlawful.
Under the Order fees of either £390 or £1200, depending on the nature of the case, were payable by claimants in order to bring a claim although these were generally repaid by employers in the event that the employee was ultimately successful at a final hearing.

Employment Tribunal claims have fallen by some 70% in the 4 years since the introduction of the Order.

The Supreme Court has held that the Order:

  • effectively prevents access to justice;
  • imposes unjustified limitations on the ability to enforce EU rights; and
  • is indirectly discriminatory by charging higher fees for certain types of claims (notably discrimination claims) than others.
It is significant to note that in order to avoid the court granting an injunction in 2013 to prevent the implementation of the Order, the government gave an undertaking that in the event the Order was eventually found to be unlawful it would refund all fees which had been paid since its introduction. It is thought that to date some £32 million has been collected in fees which will now need to be refunded in reliance on that undertaking. The mechanics of how that refund will take place have yet to be announced.

Equally what will happen now is not yet clear. Clearly one option is the abolition of the fee regime in its entirety. An alternative, which may be more palatable to the public finances is that a new fees regime will be introduced with fees at a lower level and/or involving a fee payable by the employer when a defence to a Tribunal claim is filed.

We will update this article as the implications of the judgment become clearer.