Employment Tribunal Fees are unlawful: Have the floodgates been opened?

A potentially time barred discrimination claim has been allowed to proceed following the Supreme Court’s ruling that tribunal fees are unlawful.

25 August 2017

A potentially time barred discrimination claim has been allowed to proceed following the Supreme Court’s ruling that tribunal fees are unlawful.

As explained in our earlier article the Supreme Court has ruled that the employment tribunal fees regime is unlawful.

In one of the first tribunal cases to be affected by the ruling, Dhami v Tesco Stores Limited, the Employment Tribunal exercised its discretion to extend time and allow a claim to proceed outwith the three-month time limit in circumstances where the claimant had previously presented a claim in time, but the claim had been rejected due to her failure to pay the fee.

The case
Ms Dhami originally brought a claim of age and disability discrimination against her employer, Tesco, when the fee regime was in place. She applied for fee remission, but this application was rejected. She presented the claim but did not pay the issue fee and the claim was therefore rejected.

After the recent ruling of the Supreme Court that the fee regime was unlawful, Ms Dhami submitted a new claim based on the same facts. Tesco argued that this claim had been raised outwith the three-month time limit and therefore the tribunal should decline jurisdiction due to time bar. Ms Dhami made two arguments:

1. All decisions made under the Fees Order were now unlawful, including the rejection of her original claim because she had failed to pay the fee. As such, her original claim should be resurrected.

At the time this case was heard, there was a general Case Management Order made by the President of the Employment Tribunals which stated that all employment claims or applications brought in reliance on the Supreme Court’s decision on fees should be put on hold. Had this been Ms Dhami’s only argument, then her case would have been sisted in line with the Case Management Order. The Case Management Order sisting such claims/applications has now been lifted. This is irrelevant in Ms Dhami’s case because the Tribunal was persuaded by her second argument below which allowed her to pursue her complaint.

2. Her new claim, based on the same facts, should be accepted late. It was ‘just and equitable’ to extend the three-month time limit under the Equality Act 2010 as the first claim had only been rejected due to the obligation to pay tribunal fees that had since been declared unlawful.

The tribunal accepted this argument and agreed to allow Ms Dhami to pursue her second claim even though it was presented more than three months after the act complained of.

Effect on future cases
Claimants seeking to pursue out of date claims as a result of the fee regime being declared unlawful will fall into broadly two categories:

  • Firstly, there will be claimants like Ms Dhami, who attempted to pursue a claim while the fee regime was in place. These individuals will have two procedural options: raise a new claim and seek an extension of time, or seek to resurrect the old claim (and many, like Ms Dhami, will do both to protect their position).The current Case Management Order states that “applications for the reinstatement of claims (of whatever kind) rejected or dismissed for non-payment of fees shall be made in accordance with administrative arrangements to be announced by the Ministry of Justice and Her Majesty’s Courts and Tribunals Service shortly”. It will be interesting to see how this system works in practice.
  • Secondly, there will be claimants who did not raise a claim previously and now assert that the reason for this was that they were put off by the fees. The current Case Management Order states that all such claims “shall proceed to be considered judicially in accordance with the appropriate legal and procedural principles in the usual way.” That means that claimants in these circumstances will have to go through the normal process to determine whether out of time claims can be pursued. Depending on the type of claim, this will either involve persuading the tribunal that it is just and equitable to extend the usual time limit (the test for extending time in discrimination claims), or proving that it was not reasonably practicable to bring the claim in time (the much stricter test for extending time in unfair dismissal claims). Claimants seeking to pursue a late unfair dismissal claim may struggle to demonstrate that it was not feasible for them to pay the fee. It remains to be seen what approach tribunals will take to claims of this nature, and how much emphasis the tribunal will place on any further delay to pursue a claim now that the fee regime no longer applies.  It also remains to be seen what appetite there is for people to pursue claims they had previously decided not to pursue, even if the earlier decision was because of, or at least influenced by, tribunal fees.

It has already been confirmed that those who have previously paid a fee will be entitled to reimbursement. This will be dealt with administratively. The logistics of the refund process have not yet been publicised and we expect that any refund procedure will need to take into account factors such as the situation where a respondent has been ordered to reimburse a claimant for fees paid.