Employment tribunal fees unlawful, rules Supreme Court

Photo: Amer Ghazzal/REX/Shutterstock.
Photo: Amer Ghazzal/REX/Shutterstock.

Employment tribunal fees are unlawful under both UK and EU law because they prevent access to justice, the Supreme Court has ruled.

Podcast: The abolition of employment tribunal fees
XpertHR employment law editor Laura Merrylees is joined by Laurie Anstis, a director with Boyes Turner LLP, to discuss the implications of the Supreme Court’s judgment.

Since July 2013, workers in the UK have been charged a fee to bring a claim to tribunal, a further fee if the claim is heard and another charge if they want to appeal the decision.

Following their introduction, Unison sought unsuccessfully to have employment tribunal fees ruled unlawful in two High Court challenges and in the Court of Appeal.

Unison appealed a final time to the Supreme Court, which heard the case on 27 and 28 March 2017.

Unison argued that fees made it “virtually impossible or excessively difficult” for some individuals to exercise their employment rights.

Unison also argued that the fees regime indirectly discriminates against some groups.

For example, the union said that claimants required to pay the highest fees, including £1,200 for a discrimination claim that goes to a hearing, are disproportionately female.

The Supreme Court, which handed down its judgment on 26 July 2017, has ruled unanimously that employment tribunal fees are unlawful.

The seven Supreme Court judges accepted that the effect of employment tribunal fees has been a dramatic and persistent fall in the number of claims, in particular claims of lower value and claims without a financial remedy.

According to the Supreme Court, employment tribunal fees are not reasonably affordable for households on low to middle incomes. Even where they may have been affordable, they have prevented access to justice by making it financially ill advised to pursue a claim unless claimants were certain of wining and recovering their fees.

The Supreme Court decided that tribunal fees are also unlawful under the EU legal guarantee of an effective remedy because they impose a disproportionate limit on the ability to enforce EU employment rights.

These unfair fees have let law-breaking bosses off the hook these past four years, and left badly treated staff with no choice but to put up or shut up” – Dave Prentis, Unison

The court further ruled that the fees are indirectly discriminatory on the basis that they place women at a particular disadvantage.

Reacting to the judgment, Unison general secretary Dave Prentis said: “The Government is not above the law. But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.

“The Government has been acting unlawfully, and has been proved wrong – not just on simple economics, but on constitutional law and basic fairness too.

“It’s a major victory for employees everywhere. Unison took the case on behalf of anyone who’s ever been wronged at work, or who might be in future. Unscrupulous employers no longer have the upper hand.

“These unfair fees have let law-breaking bosses off the hook these past four years, and left badly treated staff with no choice but to put up or shut up.”

The Supreme Court decision means that the Government can no longer require claimants to pay a fee to bring an employment tribunal claim, and will have to repay an estimated £32m to claimants who have already been charged a fee.

Justice minister Dominic Raab said: “In setting employment tribunal fees, the Government has to consider access to justice, the costs of litigation, and how we fund the tribunals.

“The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case. We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid. We will also further consider the detail of the judgment.”

TUC general secretary Frances O’Grady said: “Too many low-paid workers couldn’t afford to uphold their rights at work, even when they’ve faced harassment or have been sacked unfairly.

“Tribunal fees have been a bonanza for bad bosses, giving them free rein to mistreat staff. Any fees paid so far should be refunded as soon as possible.”

Rachel Suff, employment relations adviser at the CIPD, said: “Given the staggering drop in claims since tribunal fees were introduced in 2013, it’s clear that the fees were denying access to justice for many people. Sadly, this suggests that some perfectly valid claims have never been heard.”

Analysis of the judgment in R (on the application of Unison) v Lord Chancellor, with an explanation of its implications for employers, is available on XpertHR.

6 Responses to Employment tribunal fees unlawful, rules Supreme Court

  1. Roger 26 Jul 2017 at 2:41 pm #

    Great, this is going to kick off all these unscrupulous claims again with no merit. The unions will love this, thank you out of touch judges.

  2. Simon Francis 26 Jul 2017 at 2:56 pm #

    It is totally correct for the Government to return the fees already paid.

    However as Rachel Suff states in your article: : “Given the staggering drop in claims since tribunal fees were introduced in 2013, it’s clear that the fees were denying access to justice for many people. Sadly, this suggests that some perfectly valid claims have never been heard.”

    Surely these people have the right to bring their claims and the rules should be temporarily changed to allow for claims from the last 4 years outside of the normal claim time limits. There are already some precedents for claims later than the normal 3 months.

    I appreciate that this may be administratively difficult and the system may well be inundated but what is more important? Is it the tribunal system or is it justice?

  3. C Scott 26 Jul 2017 at 3:05 pm #

    A completely ridiculous decision and there are strong mechanisms in place to assist those who cannot afford the fees.

    Statements about ‘law-breaking bosses’ and ‘unscrupulous employers no longer have the upper hand’ are sad attempts at headline grabbing.

    I disagree with the CIPD that the introduction of fees and the resulting drop in claims certainly doesn’t suggest ‘that some perfectly valid claims have never been heard.”

    What it does mean is that the requirement that both employees and employers must engage in arbitration through the excellent services of ACAS results in the majority of issues being settled without recourse to tribunal.

  4. Mike Raffell 27 Jul 2017 at 6:35 pm #

    Guys – you’ve read the press summary for this rather than the Judgment. The press summary incorrectly states that the SC found the fees discriminatory, whereas the Judgment (Lady Hale at para. 133)states that ‘there is no greater disadvantage by the higher fees than are all other Type B claimants. They are all in the same boat, the women who bring discrimination claims and the men who bring unfair dismissal claims…..’.

    Just FYI. I had to re read it cos I thought I’d made a mistake from reading it yesterday.
    Mike

    • Stephen Stephen
      Stephen Stephen 28 Jul 2017 at 11:16 am #

      Mike, My understanding is that Lady Hale accepted (in the paragraphs preceding 132 and 133) that the fees system is indirectly discriminatory because: (1) Type B cases (including discrimination claims) attract a higher fee, and a higher proportion of women bring type B claims than bring type A claims, placing women at a particular disadvantage. Unison quotes figures of 54% of type B claimants being women and only 37% of type A claimants being women, so the higher fee for type B claims has a disparate impact on women compared to men. (2) It was not demonstrated that the higher fees for type B claims could be justified as a proportionate means of achieving the stated aims of the fees regime. In 134, Lady Hale concludes that “it is accepted that the higher fees generally have a disparate impact and in my view it has not been shown that they are justified”. Thanks, Stephen

  5. James Lawson 29 Jul 2017 at 6:33 am #

    The Executive waited until the final day’s sitting of Parliament on 20th July to ‘dump the trash’ of dozens of controversial reports and official documents they knew no-one would be around to criticise during the long Summer Break. It is nice to know that the Judiciary ‘returned the serve’ by issuing a jaw-breaking judgment on 26th July their Lordships will have known that no-one would be around to neutralise with a knee-jerk legislative response!

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