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Supreme Court ends employment tribunal fees with immediate effect

Employment tribunal fees were introduced for the first time in July 2013, and have been subject to challenge ever since. Over the course of the last 4 years, UNISON has launched two judicial reviews, both of which were unsuccessful in the High Court.  In 2015, UNISON’s appeal to the Court of Appeal failed.   Leave to appeal to the Supreme Court was granted and, following a two day hearing earlier this year,   this long running saga finally ended today when the Supreme Court decided to unanimously uphold UNISON’s appeal.

UNISON had asserted, and the Supreme Court agreed, that the 2013 statutory instrument implementing employment tribunal fees (the Fees Order) is unlawful for three reasons:-

  • First, it restricts the right of individuals to be permitted access to justice. Such a restriction is only lawful if it can be shown to be a proportionate means of achieving a legitimate aim, a test which, the Supreme Court decided that employment tribunal fees do not satisfy.
  • Second, the Order is inconsistent with the primary legislation under which it is implemented and frustrates Parliament’s intention both to provide individuals with substantive employment rights and to provide an accessible and affordable venue in which to enforce those rights.
  • Third, the fees regime discriminates directly against women and there is no objective justification for this discriminatory effect.

Largely the arguments at the Supreme Court centred on whether or not the fees regime could be objectively justified.  That is to say, whether or not the regime pursued one or more legitimate aim and if the regime was a proportionate means of achieving those aims.  The Government’s aims in introducing fees included transferring a portion of the costs of the tribunal service to end users and encouraging people to use alternative services to resolve disputes. Although the Court accepted that these aims were legitimate, it fully upheld UNISON’s contentions that the regime was disproportionate. The Court found that the level of fees under the regime has acted as a deterrent to claims and imposed an unjustifiable intrusion into access to justice. As such, the Court declared the regime unlawful under both UK and EU law.

What happens next?

  • As a result of its decision, the Supreme Court has quashed the Fees Order, which means that, with immediate effect, fees will no longer be chargeable for claims in employment tribunals.   Naturally, this is likely to lead to a rise in the number of disputes between employers and employees which reach the employment tribunal.
  • The Government had previously given an undertaking to repay all fees paid under the regime from its July 2013 implementation date if the fees regime was subsequently found to be unlawful. The Supreme Court confirmed today that this undertaking will now be fulfilled.
  • Although this cannot be predicted with any certainty, it is possible that the Government may, in future, seek to implement a revised fee regime which takes account of the need for proportionality.     Given the outcome of the Supreme Court case, the Government may prefer to implement any new regime via an Act of Parliament, rather than using an Order.  This would, of course, require the regime to be debated and approved by Parliament; a process which would be likely to affect the shape of any new regime.

Update – 9 August 2017

By way of update, on 9 August 2017, the President of the Employment tribunals issued Case Management Orders ordering that all claims or applications brought to the Employment Tribunal in England, Wales and Scotland in reliance upon the decision of the Supreme Court in R (on the application of Unison) v Lord Chancellor  will  be stayed (sisted, in Scotland) to await decisions of the Ministry of Justice (MoJ) and Her Majesty’s Courts and Tribunals Service (HMCTS) in relation to the implications of that decision.  Anyone who wishes to make representations in relation to the further conduct of these claims or applications is ordered to apply to the Regional Employment Judge for the relevant Employment Tribunal region or, in Scotland, to the President of Employment Tribunals (Scotland).

The impact of these Orders appears wide enough to  include applications for refunds of fees and claims that were rejected or dismissed because fees were not paid. It may also cover new claims which had not been brought previously because of fees and in which an extension of time is now sought.  However, the Orders’ Preamble do have regard to rules 11 and 40 of the Employment Tribunals (Constitution and Rules of Procedure)  Regulations 2013 which relate to rejection or dismissal of claims for non-payment of fees (or absence of remission) which suggests that the scope of the Orders may be limited to reinstatement of claims that were previously struck out or dismissed for non-payment of fees.  We must now await the decisions of the MoJ and HMCTS.

 

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