Goodbye Grayling’s Employment Tribunal fees

Supreme Court Main Entrance 03521C press office supplied 146x219Rachel Coyle analyses the Supreme Court's ruling that the Government's introduction of fees in employment tribunals was unlawful, and considers the justices' comments in relation to indirect discrimination.

In R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51 the Supreme Court unanimously ruled that the Government was acting unlawfully and unconstitutionally when it introduced the fees four years ago.

What were these fees?

S42 (1) of the Tribunals, Courts and Enforcement Act 2007 (“the 2007 Act”) provides that the Lord Chancellor may by order prescribe fees payable in respect of anything dealt with by the First-tier and Upper Tribunals or by an “added tribunal”.

S42(3) defines an “added tribunal” as a tribunal specified in an order made by the Lord Chancellor.

The ET and the EAT were so specified by the Added Tribunals (Employment Tribunals and Employment Appeal Tribunal) Order 2013 (SI 2013/1892).

So, pursuant to the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, SI 2013/1893 (“the Fees Order”), employment tribunal fees were introduced on 29 July 2013 and started at around £160 for a type A claim, such as breach of contract and wage claims, and £250 for a type B claim, covering issues such as race and sex discrimination and unfair dismissal.

There was a further hearing fee of £230 for Type A and £950 for Type B claims.

Appeals at the employment appeal tribunal involved an additional £400 lodging fee and £1,200 hearing fee.

It has taken four years for UNISON to get this decision from the highest court in the land after first commencing proceedings in June 2013 when it sought permission in the High Court to bring judicial review proceedings.

But what of the impact of those fees anyway?

The Equality and Human Rights Commission provided expert independent legal arguments during the case.

  • Discrimination cases on the grounds of sex, disability and race, and equal pay claims, all fell by around 50% in 2016 to 2017 compared to the year before the fees were introduced;
  • Pregnancy and maternity discrimination claims fell. UNISON suggested that 54% of Type B claimants were women, whereas only 37% of Type A claimants were women. This has not been helped by the short time limit of three months to bring a case at a time when women are coping with the pressures of motherhood.

There has been a notable fall in cases since the fees were introduced.

The Supreme Court noted that “there has been a dramatic and persistent fall in the number of claims brought in ETs. Comparing the figures preceding the introduction of fees with more recent periods, there has been a long-term reduction in claims accepted by ETs of the order of 66-70%” [39].

Only 8% of this was noted as being as a result of improvements in the economy in the consultation paper published by the Ministry of Justice in January 2017, entitled Review of the introduction of fees in the Employment Tribunals: Consultation on proposals for reform (Cm 9373) (“the Review Report”).

What does this decision mean for claims where fees have already been paid?

The Government must refund some £27m to people who have paid employment tribunal fees since 2013. How? When? This is an unknown.

What did the Supreme Court Justices say?

The Justices decided that the fees had the effect of preventing access to justice

“It had that effect as soon as it was made, it was therefore unlawful and must be quashed” [119].

“The constitutional right of access to the courts is inherent in the rule of law” [66].

It is needed to ensure that the laws created by Parliament and the courts are applied and enforced.

“It follows from the authorities cited that the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice” [87]

One case cited was R v Lord Chancellor, Ex p Witham [1998] QB 575 concerning court fees prescribed by the Lord Chancellor under a statutory power. Despite the wide discretion seemingly conferred on the Lord Chancellor by the statutory provision, there were implied limitations upon his powers. It did not

“permit him to exercise the power in such a way as to deprive the citizen of what has been called his constitutional right of access to the courts” (p. 580).

Primary legislation did not allude to either expressly or impliedly to the possibility of fees being imposed (p 586).

R (Hillingdon London Borough Council) v Lord Chancellor (Law Society intervening) [2008] EWHC 2683 (Admin); [2009] 1 FLR 39 concerned fees payable by local authorities in connection with applications made in public law family cases. The test was not whether the local authority would be acting inappropriately for failing to make applications which objectively should be made, it was

“whether there was a real risk that the increase in fees will cause local authorities not to make applications which objectively should be made” [61].

Adopting the logic of the court in its reasoning in R v Lord Chancellor, Ex p Witham about the scope and purpose of primary legislation, the Supreme Court confirmed that the Tribunals, Courts and Enforcement Act 2007 does not state what the purpose should be behind the exercise of power under s42(1) to prescribe fees. More importantly, it does not authorise the prevention of access to the relevant tribunals, which has been the effect of the Fees Order.

Having been referred to two hypothetical examples by UNISON, the Supreme Court identified that

“where households on low to middle incomes can only afford fees by forgoing an acceptable standard of living, the fees cannot be regarded as affordable” [93].

The Supreme Court recognised that one of the effects of the fees is that it has rendered it futile and irrational to bring a claim in cases where there is little or no financial award. Many claims involving any financial award have been considered by the Supreme Court as being for modest amounts.

The risks have been considered too great for many potential claimants in the absence of a virtually certain successful claim:

“for example where in claims for modest or no financial awards no sensible claimant will bring a claim unless he can be virtually certain he will succeed, that the award will include recovery of fees, and that the award will be satisfied in full.” [96]

Indirect discrimination

What is it?

It was not suggested that the whole of the Fees Order amounted to a discriminatory “provision, criterion or practice” (PCP). Rather, it was suggested that the higher fees payable, either for Type B claims in general or for discrimination claims in particular, are indirectly discriminatory against women (and others with protected characteristics too).

Indirect discrimination is defined in s19(2) of the Equality Act 2010 as follows:

“(1) A person (A) discriminates against another (B) if A applies to B a provision, criterion or practice which is discriminatory in relation to a relevant protected characteristic of B's.

(2) For the purposes of subsection (1), a provision, criterion or practice is discriminatory in relation to a relevant protected characteristic of B's if—

(a) A applies, or would apply, it to persons with whom B does not share the characteristic,

(b) it puts, or would put, persons with whom B shares the characteristic at a particular disadvantage when compared with persons with whom B does not share it,

(c) it puts, or would put, B at that disadvantage, and

(d) A cannot show it to be a proportionate means of achieving a legitimate aim.”

Pursuant to s19(2)(d) of the Equality Act 2010, a PCP which puts or would put people with a protected characteristic at a particular disadvantage when compared with people who do not share that characteristic is not discriminatory if the person who applies it can show that the PCP is a proportionate means of achieving a legitimate aim.

For example in British Airways plc v Starmer [2005] ILR 862, it was upheld at [17] and [18] that the tribunal’s decision that the employer’s decision to offer an employee part-time working on the basis of 75% rather than 50% of full time hours was a PCP, even though it was a discretionary management decision not applying to others.

Statistics are not necessary to show advantage; indeed the formulation of indirect discrimination in the Equality Act 2010 was intended to do away with the need for statistical comparisons where no statistics might exist, see Homer v Chief Constable of West Yorkshire [2012] UKSC 15; [2012] ICR 704 at [14].

Instead, the disparate impact may be demonstrated by other types of evidence, such as by expert evidence, as happened in this case when the Equality and Human Rights Commission gave statistics in the case.

Once it is established that there is a PCP which puts (or would put) people sharing a protected characteristic at a particular disadvantage, the next stage is to consider a comparison between those with the protected characteristics and those without it.

On a comparison of cases for the purposes of s19 there must be “no material difference between the circumstances relating to each case”: s23 (1) EA 2010.

In Akerman-Livingstone v Aster Communities Limited [2015] UKSC 15 the Supreme Court stated that in understanding the proportionately exercise the court should apply structured approach, asking itself, see [28]:

  • First, is the objective sufficiently important to justify limiting a fundamental right?
  • Secondly, is the measure rationally connected to the objective?
  • Thirdly, are the means chosen no more than is necessary to accomplish the objective?
  • Fourthly, is the impact of the rights infringement disproportionate to the likely benefit of the impugned measure?

What did the Supreme Court say in this case about it?

The Supreme Court held that the question is not whether linking the level of fees to the assumed cost of providing the service is a legitimate aim: the question is whether charging higher fees for Type B claims is consistent with the aims of the Fees Order as a whole. The Supreme Court did not seek to concentrate on a sub-group such as women who bring a discrimination claim.

“Even if, for the sake of argument, we concentrate on the sub-group of women who bring discrimination claims, it is difficult to see how they are put at any greater disadvantage by the higher fees than are all the other Type B claimants. They are all in the same boat, the women who bring discrimination claims and the men who bring unfair dismissal claims. There is no greater or different need to justify the higher fees in discrimination claims than there is in any other sort of Type B claim.” [133]

“Deterring discrimination claims is thus in itself discrimination against the people, by definition people with protected characteristics, who bring them; and, it might be thought, even harder to justify than is charging higher fees for Type B cases generally, given the importance which has always been attached in EU law to the goal of achieving equality of treatment in the workplace and to gender equality in particular.” [132]

Rachel Coyle is a barrister at 36 Civil (part of the 36 Group). She can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..