Employment Law Cases

In a monumental decision the Supreme Court has unanimously upheld Unison’s appeal and held that tribunal fees are unlawful from the outset and indirectly discriminatory and confirmed that the Lord Chancellor has undertaken to repay all fees paid to date.

Unison’s challenge was on a number of points including that Parliament could only introduce tribunal fees by way of primary legislation - an Act of Parliament. What the government actually did was to use an existing Act of Parliament, the Tribunals, Courts and Enforcement Act 2007 and from this came a statutory instrument (secondary legislation) the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013.

To do this, the minister concerned (in this case the Lord Chancellor) must act within the scope of the Act under which the regulations are made and also in accordance with well-trodden and basic legal principles. Unison’s argument was that employment tribunal fees restrict access to justice and in those circumstances the fees order must be proportionate, which it is not.

In a unanimous decision of the Supreme Court, they took us back to the common law right of access to justice, starting with the Magna Carta in 1215.  Interference with that right required clear authorisation by statute and it only permits a degree of intrusion as is reasonably necessary to fulfil objectives.

Whilst the purpose of the fees: transferring cost burdens to users, incentivising early settlement and discouraging weak or vexatious claims are all legitimate, the Supreme Court found that the fees themselves were not proportionate and prevent access to justice.

The court reminded us that sometimes employment rights are not financial or can involve small amounts of money and that given the average unlawful deduction from wages claim is £500, the fact that this should cost £390 to bring to a tribunal made it 'futile or irrational'. They said that fees must be set at a level that everyone can afford and although there is a remissions system, the Supreme Court was swayed by 'hypothetical claimant' examples which showed that  even if claimants did not qualify for a remission, having to pay fees brought them below acceptable levels of income which meant they had to go without.

The evidence showed that the introduction of fees has resulted in a substantial and sustained reduction in claims and that for those who went to ACAS under early conciliation a survey showed that the reason many did not proceed was the fees. There was no evidence that fees have prevented spurious claims which have continued despite fees.

They concluded that the Fees Order introduced in 2013 is disproportionate and was not lawfully introduced. They also confirmed that the fees indirectly discriminated against women as they are likely to bring more claims, especially discrimination and are disproportionately impacted and this could not be justified.

Lord Reed refers to the fees as an impediment to the access to justice and says 'Without such access, laws are liable to become a dead letter, the work done by Parliament may be rendered nugatory, and the democratic election of Members of Parliament may become a meaningless charade'.

The Supreme Court also confirmed that the Lord Chancellor had undertaken to repay all fees paid to date.

Comment

All employment lawyers have been united in their criticism of the tribunal fees, they were not deterring unmeritorious claims but were deterring those with good claims against poor employers from proceeding.

If the government wants to try and introduce them again they will have to pass an Act of Parliament and take careful note of the views of the Supreme Court about them being proportionate to their aims. Given the government does not have a majority, that Labour and the Liberal Democrats both said they would abolish fees and the statistics to date on the massive effect that fees have had on access to justice, it is unlikely to get much support in either the House of Commons or the House of Lords.

How the repayment of tribunal fees already paid will work remains to be seen…

The full judgment is here