In stark contrast to Unison's previous failed attempts to challenge the 2013 introduction of tribunal fees, the Supreme Court has today found in its favour, holding that tribunal fees are both unlawful and discriminatory.
The Supreme Court has held that the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 (the Fees Order) is unlawful under both domestic and EU law because it has the effect of preventing access to justice.
It found that, unlike court fees, tribunal fees bear no direct relation to the value of the claim. As such, they can be expected to act as a deterrent to claims for modest amounts or non-monetary remedies.
The Supreme Court commented on the evidence before it which showed that the effect of the fees was a dramatic and persistent fall in the number of claims brought in employment tribunals (a drop of 66-70%), with fees being the most frequently cited reason for not submitting a claim.
It was found that low to middle income households can only afford fees by forgoing an acceptable standard of living. The Supreme Court held that this shows that the fees cannot be regarded as affordable.
It went on to find that fees, even when affordable, prevent access to justice where they render it futile or irrational to bring a claim. For example, the Court felt that no sensible claimant would bring a claim for modest or no financial awards (which together form the majority of tribunal claims) unless he can be virtually certain of success, with the award including the recovery of fees and being satisfied in full.
The stated aims of the Fees Order were 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. The Supreme Court found that none of these aims had been met by the Fees Order.
The Supreme Court also held that the fees are unlawful because they contravene the EU law guaranteeing an effective remedy before a tribunal by placing a disproportionate limitation on accessing a tribunal.
The fees have also been found to be indirectly discriminatory under the Equality Act 2010. This is down to the higher fees for type B claims (total fees of £1,200) which the Supreme Court found put women at a particular disadvantage due to a higher proportion of women bringing type B than type A claims (total fees of £390).
The Supreme Court held that the charging of higher fees was not a proportionate means of achieving the stated aims of the Fees Order. It had not been shown to be more effective at transferring the cost of the service from taxpayers to users, and in some type B cases (such as pregnancy dismissal) the higher fee did not correspond to a greater workload placed on the tribunal.
The effect of the judgment is to quash the Fees Order. As to what will happen going forwards, we await the government's response. It may be that they introduce a new regime in an attempt to limit the damage caused by the judgment. With no fees, there is the possibility that we return to the position we were in four years ago with a potential influx of claims to be expected by employers. Or could it be that a side-effect of tribunal fees has been a cultural shift in the approach to tribunal claims such that the effect of this decision will not be as great as may be feared by employers. We will report back once the dust has settled. In the meantime, get in touch and let us know if you have any particular concerns for your business.
Contributors: Stuart McBride and Amy Whiting
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