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Supreme Court Rules Employment Tribunal Fees Unlawful

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July 2017 saw the end of a long legal battle undertaken by Unison over Employment Tribunal Fees in the case of R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51.

The background, in this case, dates back to 2013 when a new system of fees was introduced by the Employment Tribunals and the Employment Appeal Tribunals Fees Order.

The Government explained that its reasons for introducing these fees were threefold:

  1. To reflect the Civil Courts system who has been charging fees to litigants for many years.
  2. To transfer the significant cost of running the Employment Tribunals from the taxpayer to those actually using the system.
  3. To encourage those involved in Employment Tribunals to attempt to resolve their differences through other non-costly methods and promote early settlement.

The fees order also provided for claimants with insufficient income to pay the relevant fees by enabling them to make an application for a fee exemption demonstrating their inability to pay. If granted, this would essentially allow their claim to proceed on a fee exempt basis.

Employee HandbookWhilst the Government may have had legitimate reasons to introduce the fees, the outcome was a 70% reduction in claims. In July 2017, the Supreme Court unanimously ruled that the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013 was unlawful as the fees put in place prevented access to justice. The Supreme Court explained that access to tribunals and others courts provides a service to society as a whole and the rule of law requires people to have access to the courts.

The question of whether fees effectively prevented access to justice was decided by analysing the impact the fees had on behaviour in the real world. On the first instance, the Supreme Court explained, that the fees must be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded, which was not the case. Secondly, even if the fees were deemed affordable, they prevented access to justice where they rendered it futile or irrational for a claimant to open a claim. This is especially seen in claims of modest or no financial awards. This is because no sensible claimant could be expected to bring a claim unless he can be virtually certain that he will succeed, that the award will include recovery of fees, and that the award will be satisfied in full.

The Supreme Court concluded that:

  • The fee regime presented a real risk that persons would effectively be prevented from access to justice
  • The degree of intrusion imposed by the fee regime was greater than is justified by the objectives which the measure is intended to serve
  • The fee regime was not reasonably affordable
  • The fee regime failed in deterring unmeritorious claims as intended and instead produced a large proportion of unsuccessful claims

The effect of this judgment means that all fees that have been paid since the introduction of the order have now been deemed unlawful and therefore all fees paid in the past are to be reimbursed.

Office meeting between two womenEven though this judgment is a success for future claims as well as a good surprise for past claimants who will be receiving refunds, the judgment does not address a whole other category of people. Nor does it address the employers concerns that claims were being brought by vexatious employees.

It has been established that since the implementation of fees the number of claims reduced by 70% over the last 4 years. This suggests that a significant amount of people who would have issued a claim based on the pre-2013 regime were not able to do so purely because of the fees.

Therefore, the real question remains: what about all the other potential claims that were not pursued or abandoned?

No directions have been given over the claimants who did not have the chance to lodge a claim because of their inability to pay the fees. Claimants who are still within their statutory limit would probably still be able to lodge a claim but what about the claimants who were near the end of their statutory limit in the period of 2013-2017 and are now time barred?

In the meantime a Case Management Order recently issued by the Presidents of the Employment Tribunals of England and Scotland states that “all claims or applications brought to the Employment Tribunal in England and Scotland in reliance upon the decision of the Supreme Court” in R v Unison “shall be stayed to await decisions of the Ministry of Justice and Her Majesty’s Courts and Tribunals Service in relation to the implications of that decision.” Furthermore, “Any party or representative wishing to make representations for the further conduct of such claims or applications should do so upon application to the Regional Employment Judge for the relevant Employment Tribunal region.”

Elizabeth Sadiq is a Solicitor at Fishers Dewes Solicitors. Elizabeth deals with a range of litigious matters including employment law.