Since 2013 it has been necessary for Claimants in Employment Tribunal proceedings to pay a fee to the Tribunal Service to pursue their claim.

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1 Will the removal of Employment Tribunal fees threaten your business? Carl Atkinson carlatkinsonlawyer.com

2 Since 2013 it has been necessary for Claimants in Employment Tribunal proceedings to pay a fee to the Tribunal Service to pursue their claim. Carl Atkinson is a highly experienced Employment Lawyer and Partner at gunnercooke with many years involvement in the manufacturing and retail sectors. He advises large and small businesses on the effective management of legal risk. Last week the Supreme Court declared that this system of Employment Tribunal fees was unlawful because it restricted access to justice and was discriminatory. While this may not have been the most significant judicial intervention in the history of British employment law as UNISON has suggested, it was certainly an unexpected and an impressive victory for the Union. The unanimous decision was a reward for the tenacious legal challenge which was pursued, notwithstanding several earlier adverse judgements.

3 Within days of the decision, the Employment Tribunal has taken steps to remove all references to fees in their application processes and the Ministry of Justice has accepted responsibility for refunding fees paid by litigants in cases pursued since It is not yet clear how the process of reimbursement of fees will be managed by the Ministry of Justice, or whether the reimbursement will apply to Respondents who paid the fees of Claimants in successful claims. Some commentators have suggested that the removal of fees will lead to a significant increase in Employment Tribunal litigation and business owners will rightly be concerned about the potential increased risk of claims. My feeling is that the situation is more complex than has been suggested and that it is presently too early to decide whether there will be an avalanche of litigation against businesses as some have suggested. The Introduction of Employment Tribunal fees in 2013 was controversial and unexpected. In 2010 I attended a meeting with the legal advisers to the Conservative Party (at that time in opposition), during which we discussed various suggestions for the development of policy relating to employment law and I was assured that the Party had no appetite for the introduction of Employment Tribunal fees. It was The therefore Daily Telegraph surprising reported that within that his two years motivation of that for meeting reforming the coalition the government Employment had instructed Tribunal process Adrian was driven Beecroft by his to prepare experience a report of paying considering the 150,000 various compensation aspects of UK to employment the former Human law. Adrian Resources Beecroft is Director a city financier of one of (and his a substantial businesses backer to of settle the payday Tribunal loan proceeding business commenced Wonga) and following it was his never dismissal. It is particularly easy to clear suspect what that technical the report was experience significantly he possessed influenced which by this qualified him to experience. prepare this report. The Daily Many Telegraph of the recommendations reported that his of the motivation report for were reforming too extreme the for the Employment Conservative Tribunal Party process which was refused to driven support by his experience the suggestion of paying of employment the 150,000 at will compensation (an American to concept the former whereby Human employment Resources contracts Director of could one of simply his be businesses terminated to settle without Tribunal reason subject to a proceedings compensatory commenced payment) following and the his dismissal. abandonment It is easy of to the suspect right that to flexible the report working. was significantly influenced by this experience. The introduction of Employment Tribuna Many fees, of the together recommendations with an increase of the in the report qualification were too extreme period before the which an Conservative employee Party could which pursue refused an unfair to support dismissal the suggestion claim, were of employment supported by the at will coalition (an American government concept and whereby were employment introduced contracts in 2013 could (with simply strong be terminated dissenting without views reason from subject Vince Cable to a and compensatory others). Given payment) this rather and the troubled abandonment background of the it was right perhaps to flexible inevitable tha working. the The introduction of Employment of Tribunal Employment fees would Tribunal continue fees, to together attract adverse with an increase comment, in the but qualification the unanimous period decision o before the which Supreme an employee Court is could a significant pursue an unfair indictment dismissal of political claim were attempts to restric supported fetter access to justice.

4 by the coalition government and were introduced in 2013 (with strong dissenting views from Vince Cable and others). Given this rather troubled background it was perhaps inevitable that the introduction of Employment Tribunal fees would continue to attract adverse comment, but the unanimous decision of the Supreme Court is a significant indictment of political attempts to restrict or fetter access to justice. Following the introduction of Tribunal fees there was a significant and sustained reduction in the volume of Tribunal litigation and pro business campaigners heralded this as vindication and an example of the removal of red tape, which restricted business success. It was widely reported that there had been a decline in the level of Tribunal litigation of about 70% in the years following One obvious conclusion is that that if the introduction of fees resulted in a 70% drop in the level of litigation, the removal of fees may lead to a corresponding increase. I suspect that while there will be an increase in the level of litigation it is far from certain that this will be a return to pre-2013 levels. The introduction of Tribunal fees coincided with two other policies which also impacted the level of Employment Tribunal litigation in the UK. The other measures were the increase in the qualification period to pursue an unfair dismissal claim and the mandatory requirement that a Claimant would engage in ACAS pre-claim conciliation prior to being allowed to commence a Tribunal claim. The unfair dismissal qualification period has been repeatedly tweaked by governments over many years. Originally a period of six months it was extended by Conservative government to two years and subsequently reduced to 12 months by a Labour government. In 2013 the period was again increased to two years which meant that any employee who had a shorter period of service with their employer was prevented from pursuing an unfair dismissal claim (unless it was for a small number of claims which did not require a qualification period). My suspicion is that it is simplistic to argue that the reduction in the volume of Employment Tribunal litigation was solely due to the introduction of Tribunal fees. The fee regime provided an exemption for Claimants who were on a low income (logically a significant proportion of Claimants who had just lost their job would probably have been in receipt of benefits and would therefore have qualified for this exemption) and many other Claimants were able to access financial support from unions or other sources to cover the cost of starting a claim. I consider that there is likely to be a significant increase in Tribunal litigation following the return to the cost free access model, but I am not

5 convinced that this will be as much as the 70% figures which are being suggested by some sources. Given the probable future increase in levels of litigation and the return to zero cost option of starting a Tribunal claim, it is a good time for businesses to review their policies and procedures which could conceivably lead to a claim. Most unfair dismissal claims usually result from a flawed application of a disciplinary policy, or a defective policy which does not reflect modern good practice and a review of business policies could identify and correct and weaknesses before they result in a claim. I offer any new Client to my practice a free review of their disciplinary policies which includes advice on any weaknesses, or potential alterations/improvements to their existing policies. Why not contact me to take up this free offer and have the security of knowing that your business policies are fit for purpose in the face of an increased risk of potentially expensive employment claims. Contact me on to arrange a free consultation on your policies. Alternatively, me at carl.atkinson@gunnercooke.com or view my website carlatkinsonlawyer.com. gunnercooke llp is a limited liability partnership registered in England and Wales under no. OC Authorised and regulated by the Solicitors Regulation Authority (546420). A list of its members is open for inspection at its registered office: 53 King Street, Manchester M2 4LQ.