In July 2017, the Supreme Court ruled that employment tribunal claim fees were unlawful, and now it has been confirmed that an ex-employee has been granted an extension of time to pursue their out-of-date unfair dismissal claim, on the basis that the original action was dropped due to the fees.
In giving the go-ahead for an extension in the case of Dhami v Tesco Stores Ltd, the claimant could show they had lodged the original claim within the three-month time limit and the fees were an important reason for not proceeding. It is likely that many more out-of-date claims will be put forward, and, as a result, employers may find themselves battling situations that were considered closed.
The Supreme Court ruling in July in R (on the application of UNISON) v Lord Chancellor put an end to the requirement for a fee to be paid on submitting a claim, known as the issue fee, and another fee a few weeks before the hearing. Introduced in 2013, the cost was more than £1,000 for complex claims, and the number of tribunal claims dropped by two-thirds as a result.
The public service union UNISON brought the case, arguing that the fees undermined the fundamental principle of access to justice for all, and that it was discriminatory as women generally earn less and so were likely to find it harder to pay. The Supreme Court agreed, saying it was unlawful under both domestic and EU law, and the fees were abolished with immediate effect. Any payments made under the scheme are to be refunded.
Commentators and employer groups were quick to predict a steep increase in claims back to previous levels, arguing that with no financial risk involved, employees will be more likely to make a claim, whether legitimate or bogus.
Stevyn Jackson, employment law specialist with Mercers, comments as follows: “The Supreme Court ruling in July is one of the most important Court decisions in living memory in terms of its impact and ramifications. Normally a change in the law is not retrospective. In this instance, it is because the Supreme Court decided that the fee system was unlawful from its inception in 2013. Employers who fear they might have avoided a claim over the past 4 years due to an employee being unable to afford the applicable fees should make sure they preserve and do not inadvertently destroy the personnel records of any such employees in case an out of time claim is brought. Going forward it is more vital than ever for employers to adopt good management practice in terms of disciplinary and grievance procedures as the likelihood of claims with there being no fee system in place is much higher than pre-July 2017”.
Experts further suggest that if you find yourself facing a claim, then think about maximising mediation efforts and using ACAS Early Conciliation as an opportunity to resolve things swiftly. Equally, if having investigated the claim and having tried to resolve the matter by conciliation, you still believe that the employee is just trying their luck because they have nothing to lose, it may be worth being bullish and going for costs, a deposit order or applying to strike out proceedings.
Website content note: This is not legal advice; it is intended to provide information of general interest about current legal issues.
If you have an enquiry regarding employment, contact Stevyn Jackson, Associate at Mercers, on [email protected] or on 01491572138.