It's been just over two months since the Supreme Court quashed the Employment Tribunal fees regime.
How does the land now lie? Has there been an impact on the volume of Tribunal claims issued? Can past claims which were not pursued due to the fees regime be resurrected? How can respondents defend such claims? And what plans are in place within the Tribunal system to cope with the inevitable fall out of the decision? We recently attended a talk where a panel of speakers made up of Regional Employment Judge Parkin and Bronwyn McKenna, a member of the UNISON legal team, debated these very issues. We share their thoughts, as well as our own, in this article.
Has there been an impact on the volume of Tribunal claims issued?
Although no official statistics are available, there have been anecdotal reports from Employment Judges that there has been a sharp increase in claims since the fees regime was quashed, ranging from a 2 to 7-fold increase depending on region. For example, the Yorkshire & Humber region has seen a 2 - 3 fold increase in claims since the abolition of fees. This increase is particularly notable given that August is a typically a "flat month".
However, whilst many commentators expect the volume of Tribunal claims to increase, it is unclear whether they will return to the 2011/2012 levels. One reason why we might not get back to 2011/2012 numbers is because the ACAS Early Conciliation regime was introduced in May 2014, with the result that a higher proportion of potential claims are either settled or not pursued.
Also notable is the reported increase in certain types of claims that had dipped since the introduction of Tribunal fees, such as wages claims, ordinary unfair dismissal claims and small holiday pay claims that are not part of a collective action.
Can past claims which were not pursued due to the fees regime be resurrected?
Claimants who did not pursue a potential claim because of the need to pay a fee may now be able to resurrect their claim. In some cases, claims were not pursued due to the need to pay the initial admission fee. These cases were processed via a central operation in Leicester and all of these people could now, technically, bring a claim. In other cases, the admission fee was paid, but the claimant then failed to pay the more substantial hearing fee. These claimants would have been sent an "unless notice" giving them a certain number of days to pay the fee. If the fee was not paid then this led to an "administrative dismissal" of that claim. These claims should also be allowed to now be reinstated as they were "unlawfully stopped" from proceeding.
However, in order to resurrect a claim in this way, the claimant would be expected to:
- show they had a strong claim;
- provide evidence that they could not afford to pay the fee at the time;
- prove that they had initiated early conciliation (a free service available to all);
- prove they had applied for help with fees (remission) and been refused it; and
- issue a claim straight away / make an application for resurrection of their claim. Indeed, advice on the Citizen's Advice Bureau website emphasises the need for individuals to be proactive.
There have been reports that some employers have responded to this risk of "zombie claims" by auditing all employment disputes arising over the last 4 years to understand how many were dismissed due to non-payment of a fee and/or because a fee remission application failed. Such an audit should also explore whether the relevant evidence and witnesses are available should the case be resurrected.
How can respondents respond to the resurrection of claims?
If claims are revived administratively, it may be possible to resist the claim on the basis that it is no longer possible to have a fair hearing given the passage of time. Certainly, this will be the first line of defence for the majority of, if not all, respondents. However, to succeed, they will need to show, for example, that witnesses are no longer contactable or able to remember events in enough detail as they happened so long ago. Alternatively, the respondent can try to argue that the Tribunal fee was not the real deterrent or reason why a claim was not issued or taken to a full hearing, but this may be hard to prove.
What is likely to happen next?
At the talk we attended, some details were given on what lies ahead:
- New scheme for resurrecting past claims: there are plans to set up a scheme to allow past claims to be resurrected. It is possible that the Employment Tribunal will notify past claimants of their rights to resurrect a claim: whilst the Tribunal holds limited information on past claimants, they should have lists of all cases that were administratively dismissed. Alternatively, the Employment Tribunal may leave it to individuals to resurrect a claim off their own back. The approach has not yet been confirmed.
- New scheme to reimburse fee payments: any scheme that is introduced will also deal with the reimbursement of the some £27m worth of fees paid. These fees were mostly paid by claimants but some respondents also paid fees e.g. for judicial mediation or as part of a costs order. In the latter situation, the expectation is that the fee will be paid directly to the respondent. Details of the scheme should be available shortly. What is clear is that it will be complex to work out and may involve unpicking settlement agreements and COT3s where fees were paid as part of a settlement. And what happens if the union paid the fee or an individual used their legal expenses scheme to get the claim issued?
- A new fees system? The jury is out on whether a new system of fees will be introduced. Regional Employment Judge Parkin's view is that one will be introduced but not in the foreseeable future given the Government's other priorities at present. However, at the September Yorkshire and Humber Tribunal user group meeting, Employment Judge Robertson said he did not expect a replacement fee system to be introduced not least because it will almost be impossible to create a new scheme that addresses the discrimination issues raised by the Supreme Court where it concluded that the old fees regime was indirectly discriminatory against women.
- Tribunal resourcing and facilities: no new salary or fee paid judges have been recruited since 2013 and, in that time, numbers have dropped as judges turned to the civil courts or have retired. If the Tribunal system is unable to recruit more judges, then this may lead to long waits for cases to get to hearing (up to a year) and more cases being postponed at the last minute. Other changes in the Court and Tribunal system (e.g. the sale of various estates and moving Tribunals into civil court buildings) will also mean that there are fewer rooms available to hear a rising number of claims. This will inevitably add to the delay in cases getting to hearing.
So, where does this leave us?
Whilst the principle of access to justice is extremely important, the removal of the fees system represents a further challenge for employers who are already shouldering increased employment costs such as the Apprenticeship Levy, the increase in the National Living Wage and the cost of compliance with the Gender Pay Gap Reporting legislation.
That said, whilst it feels inevitable that we will continue to see an increase in the number of claims being brought (perhaps an initial spike following the Supreme Court's decision and then a steady further increase over coming months), it feels unlikely that the number of claims will reach the peak we had in 2012/2013. What we may see, however, are more speculative claims from disgruntled employees (or even job applicants rejected at the interview stage) pursuing a claim with the aim of obtaining a financial settlement. Whatever happens, it is certainly a time to ensure that your HR team and line managers are managing risk in the business properly, from checking that they are treating their employees fairly and lawfully, to settling potential claims on a commercial basis such that they never find their way to an Employment Tribunal.