Supreme Court holds Employment Tribunal fees are unlawful

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In what has been described as the biggest news in employment law in the last 50 years, on 26 July 2017, the Supreme Court ruled that the Employment Tribunal fees regime introduced controversially in 2013 was unlawful.

The decision was surprising, partly because UNISON, who brought the claim, had lost the three previous hearings in the lower courts. However, it was also surprising because it was based first and foremost on profoundly English common law principles relating to the constitutional right of public access to justice, and only secondarily on EU law and European human rights principles. As such, the ruling has been described as "Brexit-proof".

The lead judgment even cites Magna Carta as a guarantee of access to courts, which administer justice promptly and fairly: “Nulli vendemus, nulli negabimus aut differemus rectum aut justiciam” (“We will sell to no man, we will not deny or defer to any man either Justice or Right.”)

In reaching its decision, the Court reviewed the evidence regarding the effect of fees on Tribunal claims, noting: “… a dramatic and persistent fall in the number of claims …” since fees were introduced three years ago.

The Court also observed that many claims are for modest amounts and that if: “… fees of £390 have to be paid in order to pursue a claim worth £500 (such as the median award in claims for unlawful deductions from wages), no sensible person will pursue the claim unless he can be virtually certain that he will succeed in his claim, that the award will include the reimbursement of the fees, and that the award will be satisfied in full.”

The introduction of Employment Tribunal fees has been regarded by many as a bar to proper access to justice. Particularly as fees are often payable at a time where the claimant would invariably be in the weakest of financial positions.

The Court noted that discrimination cases will typically cost more for claimants, because of the complexity of the claims and the time allocated for hearings. It found that Tribunal fees were contrary to the Equality Act 2010, as they disproportionately affect women, who are more likely to bring discrimination claims.

Readers should note the immediate practical effect: the 2013 Fees Order has been held unlawful and quashed so that, as from 26 July 2017, fees have ceased to be payable for Employment Tribunal claims and appeals to the Employment Appeal Tribunal. Moreover, the Lord Chancellor has given an undertaking to reimburse all fees previously paid.

UNISON has estimated that the government will have to refund more than £27 million to the thousands of people charged for bringing claims in the Tribunal since July 2013.
It is worth noting that the Court stressed that the key issue was not that there were fees in place. It was the fact that the level of fees introduced made no sense other than to deter people from enforcing their statutory rights.

The Supreme Court confirmed that fees would be lawful so long as they were not indirectly discriminatory (or justified if they were) and: “… if set at a level that everyone can afford, taking into account the availability of full or partial remission.”

As such, it remains to be seen whether there will be a return to the pre-2013 level of Tribunal claims or whether the government will attempt to re-introduce fees in a different form.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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