The Supreme Court has allowed the appeal by Unison, holding that the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013 (which led to a 70% reduction in claims) is unlawful and will be quashed.

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.

In the main judgment, the Supreme Court noted a contrast between the level of fees in the tribunal, and the small claims court where it is very much cheaper to bring a claim for a small sum of money. Lord Reed emphasised the importance of the rule of law, and that specific statutory rights granted by Parliament may not be reduced by statutory instrument from a minister. He relied on the fact that employment tribunal cases are important for society as a whole, not just the individuals involved.

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.

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

The Supreme Court held that the Fees Order DOES effectively prevent access to justice, it also held that the Fees Order imposed unjustified limitations on the ability to enforce EU rights (ie those claims based on EU law), and was thus unlawful under EU law.

Baroness Hale gave a separate, short, judgment on the indirect discrimination aspects of the fees regime. She concluded that it was indirectly discriminatory to charge higher fees for type ‘B’ claims (which include discrimination claims) than type ‘A’ claims.

What Will Happen Next?

  • It is unlikely the fees regime will be abolished entirely. It is more likely that the government will issue a consultation paper and then bring in a new fees regime with fees at a lower level.
  • The Employment Tribunals Service will have a lot of work to do in rewriting the tribunal rules and reprogramming the online Claim Form system. Tribunals have already stopped accepting payments for claims filed in person.
  • The Supreme Court made it clear that all fees paid between 2013 and now will have to be refunded by the Lord Chancellor’s Department (and the Lord Chancellor has agreed to do so). This is easier said than done – many successful claims will have had fees ordered to be paid by the Respondent, and there will probably need to be a manual trawl of all decided cases.

The judgement does not consider the situation of people who chose not to bring a claim because of the fees. The tribunals may, following today’s decision, decide it is just and equitable to extend the time for bringing a claim for those claimant who did not bring a claim because they were significantly impeded from doing so by an unlawful fees regime.

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