Union wins Supreme Court battle over imposition of fees in employment tribunals

A Government fees order imposing fees in the Employment Tribunal and Employment Appeals Tribunal was unlawful under both domestic and EU law because it had the effect of preventing access to justice, the Supreme Court has ruled.

In R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51 a seven-justice panel of the Court also found that the fees were indirectly discriminatory. Unanimously allowing the union’s appeal, they quashed the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, SI 2013/1893.

Unison predicted that the Government would have to refund more than £27m to those people charged for taking claims to tribunals since the fees order came into effect on 29 July 2013.

Prior to this date, a claimant could bring and pursue proceedings in an Employment Tribunal and appeal to the EAT without paying any fees.

In introducing the fees order the Government said it had been seeking to transfer part of the cost burden of the tribunals from taxpayers to users of their services, to deter unmeritorious claims, and to encourage earlier settlement.

Since 29 July 2013, persons bringing claims in the Employment Tribunal, and appealing to the Employment Appeal Tribunal, have been required to pay fees ranging from £390 to £1600.

The fees order also made provision for the full or partial remission of fees if a claimant’s disposable capital, together with their partner’s, was below a specified amount.

Following the introduction of fees, official statistics showed a dramatic reduction in claims brought, with a greater fall in particular in the number of lower value claims and claims in which a financial remedy was not sought.

Unison’s challenge to the fees order was unsuccessful in two sets of proceedings in the High Court, and on appeal in the Court of Appeal.

Before the Supreme Court, the union argued that the making of the fees order was not a lawful exercise of the Lord Chancellor’s statutory powers, because the prescribed fees interfered unjustifiably with the right of access to justice under both the common law and EU law, frustrated the operation of Parliamentary legislation granting employment rights, and discriminated unlawfully against women and other protected groups.

Giving the judgment of the Supreme Court on all issues except discrimination (where Lady Hale gave the judgment), Lord Reed said fees must be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded.

He added that even where fees are affordable, they prevented access to justice where they rendered it futile or irrational to bring a claim unless the claimant could be virtually certain he would succeed, that the award would include recovery of fees, and that the award would be satisfied in full.

The judge also said that while the stated purposes of the fees order were legitimate aims, it had not been shown that the fees order was the least intrusive means of achieving those aims.

The fees order was also unlawful because it contravened the EU law guarantee of an effective remedy before a tribunal; it imposed disproportionate limitations on the enforcement of EU employment rights.

In relation to discrimination, Lady Hale said the fees order was indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage, because a higher proportion of women bring type B than bring type A claims.

The charging of higher fees was not a proportionate means of achieving the stated aims of the fees order, she added.

Unison general secretary Dave Prentis said: “The Government is not above the law. But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.

“The Government has been acting unlawfully, and has been proved wrong – not just on simple economics, but on constitutional law and basic fairness too.

 “It’s a major victory for employees everywhere.”