Tag Archive: employment tribunal fees

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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Challenge to employment tribunal fees fails

Gurpreet Duhra, a Partner in our Sheffield office comments: The High Court has dismissed a second judicial review application by Unison challenging the introduction of employment tribunal fees.  This means that, for now, employees will still have to pay a fee to bring a claim against their employer.  It appears, however, that permission to appeal has been given.  This issue is also riding high in the political arena with the Labour party indicating that, if it is elected in 2015, it has plans to reform the system.  Fees therefore remain a hot topic and future developments seem likely.

Employment tribunal fees were introduced for the first time in July 2013. Claimant employees who do not qualify for fee remission (which is only available in very limited circumstances) must now pay an issue fee to bring their claim (ranging from £160 – £250), and a hearing fee to have their case heard (ranging from £230 – £950).  This has had a dramatic impact in terms of the number of claims being brought. The latest employment tribunal statistics for the period July – September 2014 show a 61% drop in the number of single claims compared to the same quarter in 2013.

In February 2014, the High Court rejected Unison’s first judicial review application on the grounds that it was premature and that insufficient evidence was available to challenge the introduction of fees. In September 2014, following the publication of statistics which demonstrated a significant reduction in the number of claims being brought, the High Court granted permission for a second judicial review. This was heard on 21 and 22 October 2014 and judgment was handed down today, 17 December 2014.

The High Court has, however, again rejected the application.  This time round, Unison had relied on two grounds of challenge. The first was the EU principle of effectiveness. This is based on a premise that costs cannot be such that it is virtually impossible or at least exceptionally difficult for a significant number of potential claimants to bring a claim. Secondly, Unison argued that the fee scheme operated in an indirectly discriminatory way with respect to women, ethnic minorities and the disabled and that that was not justified.

On the first ground, despite finding that the “reduction in the number of cases brought is striking”, the court was unwilling to find that there had been a breach of EU law. It said that there was “no evidence at all that any individual has even asserted that he or she has been unable to bring a claim because of cost”. In its view, the court could only test the argument if there are actual cases which will enable the court to review the principle of effectiveness in concrete situations.

In relation to Unison’s second argument, the court said that Unison’s case had focussed almost exclusively on discrimination against women and so it would only consider issues of sex discrimination. It said, however, that if the sex discrimination claim did not succeed it was unlikely that a claim based on any other protected characteristic would do so. The court held that the fee scheme was seeking to achieve three distinct objectives: to transfer some of the annual cost of running  employment tribunals to the users who benefit from it and can afford it; to make tribunals more efficient and effective, not least by removing unmeritorious claims; and to encourage alternative methods of employment dispute resolution. The court found that each of these objectives is legitimate and that the scheme, taken overall, was justified and proportionate to any discriminatory effect. It was therefore not indirectly discriminatory.

Unison has announced that it has been given permission to appeal the High Court’s decision and that it intends to do so.  For now, it seems likely that the number of claims brought by employees against employers will continue to fall well short of the numbers which were brought pre-fees.  This is likely to be welcome news for employers. However, it does continue to raise questions in respect of access to justice for those employees who do have meritorious claims. It remains to be seen whether, on appeal, Unison will be able to persuade the court to find differently. In the meantime, it may be beaten to the post by the general election. If there is a change in the political landscape reforms to the fees system seem likely in any event.

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