This morning the Supreme Court ruled that employment tribunal fees are unlawful and are abolished with immediate effect.
The Government introduced tribunal fees in 2013 with the objectives of reducing the cost of the tribunal service, weeding out weak claims, and encouraging settlement. However the introduction of tribunal fees resulted in a sustained 70% drop in tribunal claims and the Government was accused of throwing the baby out with the bath water. The high cost of fees and the low value of claims meant that claims were unaffordable for many litigants and uneconomic for most.
Unison sought to make an immediate challenge by judicial review but this was rejected as premature and their second challenge in 2014 was dismissed by the Court of Appeal as unsupported in evidence.
However in 2015 the Scottish Government committed to abolishing tribunal fees and this was to be effected following the transfer of the employment tribunal service to Scotland but the issue was pushed into the legislative long grass.
Furthermore the Ministry of Justice's Review of tribunal fees in January 2017 found that the economic and behavioural objectives of the fee scheme had been broadly met and that there was no conclusive evidence that the fee scheme prevented access to justice. Any injustice could be remedied by widening the scope for remission of fees on narrow financial grounds.
However the Supreme Court disagreed with the MOJ and today found that tribunal fees do prevent access to justice and are also indirectly discriminatory – fees for discrimination claims are higher than those for other employment claims causing disparate impact to those with a protected characteristic. Accordingly Unison's final challenge was successful on appeal to the Supreme Court.
Tribunal fees are therefore abolished with immediate effect and all fees previously paid fall to be refunded – arguably including those paid by employers ordered to meet Claimant costs.
Those claimants denied access to justice (who decided against bringing a tribunal claim because the fee costs were too high) may seek judicial permission to bring their claims late – this will be easier for those claiming discrimination, where the extension is on just and equitable grounds, rather than for those claiming unfair dismissal, where the test turns on reasonable practicability.
Either way employers should steel themselves for a flood of historic claims pertaining to 2013 onwards in addition to the likely sharp increase in future claims. Please contact our specialist employment lawyers for further advice.
The full Supreme Court judgment R (on the application of UNISON) v Lord Chancellor is available here.
Ruth Moffett assisted with this article.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
