26/07/2017

Supreme Court decides tribunal fees are unlawful

NEWS

The Supreme Court has allowed the appeal by Unison against the legality of employment tribunal fees, holding that the current fees regime prevents access to justice and is unlawful.

DETAILS

The Supreme Court considered the lawfulness of the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013. These regulations have led to around a 70% reduction in tribunal claims.  The fee payable for issuing a claim such as unpaid wages or holiday pay was £160 and a further fee of £230 to take the case through to a tribunal hearing.   The fee for issuing claims such as discrimination and unfair dismissal was £250 with a further hearing fee of £950. Unison’s challenge to the fee regime, by way of an application for judicial review, had until now been unsuccessful. 

The Supreme Court stated that for the fees to be lawful they have to be set at a level everyone can afford taking into account potential remission of fees. On the evidence before the Court they determined that this requirement had not been met.  They concluded that the fall in tribunal claims since the introduction of fees had been so sharp and substantial that a significant number of people must have found the fees unaffordable.  

The Supreme Court also noted that there was no evidence to suggest that the payment of fees had the effect of reducing the number of unmeritorious claims (a secondary objective for the introduction of fees).   The proportion of unsuccessful claims was higher after fees were introduced. They also pointed out the absurdity of paying a relatively high level of fees where only a modest amount of money is being claimed.  The example given was in a “deductions from wages” claim for £500 where a fee of £390 would be payable. 

Finally, the higher fees charged for certain types of claims such as discrimination claims were also found to be indirectly discriminatory by the Supreme Court.

As a result of this ruling, it appears that all fees paid between 2013 and now will have to be refunded by the Lord Chancellor's Department (and the Lord Chancellor has already agreed to do this) and  fees will no longer be payable for new claims. 

This does not mean that the fees regime will necessarily disappear completely.  It is possible that the government will look to introduce a new fee regime with lower or different fees payable. 

It has also been suggested that former employees who previously chose not to bring a claim may try to bring one now outside of the normal three month time limit.  This could be on the basis that it was not reasonably practicable to bring a claim in that time period as they could not afford the fees.

COMMENT

Hannah Ball comments: “This is a landmark decision in which the tribunal fees system has been declared unlawful from the outset, and has been quashed with immediate effect.  Although perhaps unexpected by many people, this is the correct decision where the evidence has shown that fees have prevented access to justice for employees, with a disproportionate impact on women in particular. The system now needs to be dismantled and we await to see if anything takes its place.  

For employers we recognise that this may not be welcome news but by taking advice early and keeping up to date with employment legislation many claims may be avoided. In addition, we now live in a climate where tribunals will not only strike out spurious and unreasonable claims but also make significant costs awards against claimants engaging in such vexatious activity.”

If you require further assistance, please contact a member of the team.