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Employment Tribunals: What is the impact of the abolition of the fees regime?

The Ministry of Justice (“MoJ”) has published Quarterly Statistics covering the period from July to September 2017 which for the first time show the effect of the abolition of Employment Tribunal fees following the Supreme Court’s landmark ruling in R (on the application of UNISON) v Lord Chancellor (“Unison”).

The statistics show that between July and September 2017, the number of single claims brought in the Employment Tribunal rose by 64% – the highest increase in four years. Significantly, the most common jurisdictional complaint was unlawful deductions from wages claims, which increased from 549 claims in July 2017 to 2,926 in August and 2,027 in September 2017. Unfair dismissal claims also witnessed a large increase, with 836 claims being brought in July 2017 and 1,915 in August 2017.

Clearly, this demonstrates the much anticipated effect of the abolition of Employment Tribunal fees. Certainly, the immediate rise in unlawful deductions from wages claims (including underpaid holiday pay) is entirely predictable, given that, during the fees era, the cost of bringing such claims was often completely disproportionate to the amount in dispute.

Whilst we must of course wait to see further figures to see whether this is an established upward trend and a sign of things to come, this would suggest that attitudes have already changed and we are likely to see a continuing rise in the number of workers willing to pursue claims in the event that such disputes cannot be resolved directly with their employers.

That being said, there is still some way to go until the number of claims reaches the level of pre-July 2013 when Employment Tribunal fees were introduced.

Employment Judicial capacity

Much of the commentary following the Supreme Court’s decision in Unison has focussed on the inevitable increase in the number of Employment Tribunal claims. Less attention appears to have been paid as to how the Employment Tribunal Service (“ETS”) will actually cope with such an increase in claims

Even before the Unison decision, monthly receipt of claims by the ETS outweighed the number of disposals, leading to a backlog of claims moving forwards. Since the decision, between July and September 2017, the number of disposals of claims decreased by 1%, which drove a 37% increase in the number of single cases outstanding.

One of the main reasons for this strain on the ETS is the simple lack of employment judges available to hear claims. Judge Brian Doyle, President of the Employment Tribunal, has announced a business case (subject to approval) to allow for the recruitment of additional fee-paid Employment Judges. In the short term, the MoJ has increased the cap on the maximum annual sitting days for fee-paid judges from 70 to 110 days.

In our own experience, we are already witnessing final hearings being postponed on the day or shortly before due to “lack of judicial capacity”, leading to delays and both parties’ incurring further costs.

There are, of course, a number of existing methods of dealing with litigation without going to a full hearing available to employees and employers, including ACAS conciliation, judicial assessment and judicial mediation. Each of these methods is likely to be encouraged to an even greater extent given the increased burden on the ETS.

Refunds

On 15 November 2017, the Government rolled out its scheme by which parties were able to reclaim Employment Tribunal fees. Parties are able to apply for refunds using the scheme online (available to litigants in person) or by post/email (available both to litigants and those who paid fees on someone else’s behalf, e.g. lawyers and trade unions).

The MoJ has also recently published the Employment Tribunal Fee Refund Statistics which show that of the 4,689 refund applications received by the MoJ, 2,660 of these have been processed. Over 2,000 refund payments have been made by the MoJ coming to a total value of £1,808,310, and it is has emerged that the repayment of fees will continue for up to two years.

Extensions of time

In the four year period between July 2013 (when Employment Tribunal fees were introduced) and July 2017 (when they were abolished), Her Majesty’s Courts and Tribunal Service confirmed that there were approximately 7,500 cases which were struck out for non-payment of fees.

These claims will now be treated as if they had not been struck out and those affected are being afforded the opportunity to submit a new ET1 claim form. What this does not take into account are the historical claims that were not pursued in the first place in instances where the Claimant could not afford to pay the issue fee in order to submit their claim. In such cases, it shall be for the Employment Tribunal to decide either whether it was reasonably practicable for the claim to have been submitted in time (and if it was not, whether the claim was then submitted within a reasonable period) – the appropriate test in relation to some types of claim e.g. unfair dismissal – or whether it would be ‘just and equitable’ to extend the time limit the appropriate test in e.g. most discrimination claims.

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Legal news, views, trends and tools for HR Professionals. Stay ahead. Go further