Supreme Court rules tribunal fees unlawful
24 August 2017
The Supreme Court has ruled that the introduction of fees in 2013 for bringing claims in the employment tribunals was unlawful under both domestic and EU law. The court has quashed the order that brought the fees into effect.
R (UNISON) v Lord Chancellor, Supreme Court
UNISON pursued a judicial review of the Government’s decision to introduce employment tribunal fees, which was rejected (twice) by the High Court and then by the Court of Appeal in August 2015.
The introduction of fees saw the number of tribunal claims fall by around 70%, with the greatest fall in the number of lower value claims. According to the Supreme Court judgment: “The fall in the number of claims has in any event been so sharp, so substantial and so sustained as to warrant the conclusion that a significant number of people who would otherwise have brought claims have found the fees to be unaffordable”.
In addition the court accepted evidence that the introduction of fees had made a much less significant contribution to tribunal costs than expected, had failed to deter unmeritorious claims and did not appear to have improved the proportion of cases settled via Acas.
Supreme Court decision
The court was satisfied that the introduction of tribunal fees had the consequence of preventing access to justice, a fundamental principle underpinning the legal system in this country. The level of the fees was unaffordable for those on low to middle incomes, and rendered it futile or irrational to bring smaller value claims.
The introduction of fees was also found to be in contravention of EU law, as it imposed disproportionate limitations on the enforcement of EU employment rights.
The court further upheld the claim that tribunal fees were indirectly discriminatory under the Equality Act 2010, putting women at a particular disadvantage since a higher proportion of women bring type B (discrimination) claims, which were charged at a higher rate. The charging of higher fees was not a proportionate means of achieving the stated aim of transferring the cost of the service from taxpayers to users.
- From the date of the judgment (26 July 2017), claimants no longer have to pay any fee when submitting their claim form, or prior to their case being heard by an employment tribunal (or the Employment Appeal Tribunal).
- We are likely to see an immediate upturn in the number of claims, which the tribunal service is not sufficiently resourced to handle. There is likely to be a particular increase in the number of low value or non-monetary claims (for example, in respect of unpaid holiday pay and other unlawful deductions).
- The Government had already committed to reimbursing fees paid by claimants, in the event UNISON’s challenge was successful. This is estimated at around £32m. An announcement on the arrangements for the reimbursement of fees is expected in September.
- We will see further litigation from those who claim to have been prevented from bringing a tribunal claim due to the requirement to pay a fee, and who are now out of time. Tribunals will need to consider whether or not it was ‘reasonably practicable’ for a claim of unfair dismissal to have been brought in time, or whether it is just and equitable to extend time to allow a claim for discrimination to proceed. It has already been reported that one such application has been successful and a claim allowed to proceed.
- It is also possible that the Government will seek to introduce an alternative, fairer, fees regime to contribute to the cost of running the employment tribunal service.
The Supreme Court judgment is available here.
This article is from the July issue of Employment Law Update, our monthly newsletter for HR professionals. To download the latest issue, please visit the newsletter section of our website.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at August 2017.