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Supreme Court abolishes employment tribunal fees: practical implications for employers

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Summary: The Supreme Court has unanimously held that the employment tribunals fees regime that was introduced in July 2013 is unlawful and must be quashed. This raises various practical issues for employers.

The Supreme Court has decided that the employment tribunal fees regime is unlawful under both domestic and EU law, because it has the effect of preventing access to justice. The Court also indicated that the regime, which charges fees at the higher rate for those claiming discrimination, is indirectly sex discriminatory.

As a result of the Supreme Court’s judgment, employment tribunal and EAT fees are no longer payable, effective immediately. The Government will also need to reimburse those who have paid fees in the past.

Practical implications for employers

  • The introduction of employment tribunal fees resulted in a drop of up to 70% in the number of claims over the last few years. Now that fees are no longer being charged, employers can expect to see an increase in the number of employment tribunal claims that are brought.
  • The requirement to pay fees is hardwired into the employment tribunal process. In the very short term we can therefore expect guidance from the Employment Tribunals about changes to procedure to take account of the fact that no fee payments are now necessary.
  • Whilst most fees were paid by the claimant, employers were also required to pay fees in some circumstances, for example when applying for reconsideration of a judgment, making a contract counterclaim, or for judicial mediation. Employers who have done this can therefore expect reimbursement.
  • The Government may well look to introduce a revised fees regime. This is something the Supreme Court contemplates in its judgment, when it discusses why the existing fees regime is discriminatory. However, it is likely to take some time before any replacement regime would be put in place, so we can expect the current "no fees" environment to continue for at least a while.

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