Since the introduction of tribunal fees, there has been a dramatic decline in the volume of claims being brought in the tribunal by 66-70% according to a consultation paper published by the Ministry of Justice in January 2017. In practice, I have also seen that the number of Tribunal cases has dropped since tribunal fees were brought in.
Therefore it was a happy day for me on the 26 July 2017, when the Supreme Court ruled that these fees were unlawful. Not only do I enjoy a good tribunal case (which I hasten to say I have never lost), tribunal claims do have a deterrent effect so employers follow relevant legislation and society does benefit through good employment practice.
As has been recognised in the latest Supreme Court’s judgment, the administration of justice in Tribunals is of value to society as a whole, especially where cases establish legal rules and principles of general importance. It was also recognised that low value claims brought by the most venerable workers would particularly be deterred from bringing claims due to the fees.
So what does this mean?
The immediate consequence is that Employment Tribunal and Employment Appeal Tribunal fees cease to be payable under the existing scheme.
Background - when did tribunal fees start being payable?
Tribunal fees were brought in with effect from 29 July 2013 under the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 (Fees Order). Unless an individual qualified for fee remission, Employment Tribunal Claimants and Employment Appeal Tribunal Appellants were liable to pay a fee in order to bring and pursue claims and appeals.
How much were the Employment Tribunal fees?
Claims were divided into two types: Type A (such as claims for statutory redundancy payments, unlawful deduction from wages and breach of contract) and Type B (such as claims for unfair dismissal, discrimination and whistleblowing). For a single claimant, the fee to issue a Type A claim was £160 and the hearing fee was £230. An issue fee for a Type B claim was £250 and the hearing fee was £950.
How much were the Employment Appeal Tribunal Fees?
Appeals at the Employment Appeal Tribunal attracted a £400 lodging fee and a hearing fee of £1,200.
How long has the challenge by Unison been going on for?
Unison’s fight to challenge the lawfulness of the introduction of the fee regime has been going on for 4 years since the introduction of the Fee Order.
Unison initially challenged the introduction of tribunal fees by way of judicial review which was heard by the High court and dismissed on 7 February 2014. One of the key reasons for dismissal of the claim at the time was the fact that the Court believed the claim to be premature due to lack of evidence available as to the impact of the fees order. Further proceedings were filed and also dismissed in a second High Court Judicial review challenge.
Permission to appeal was granted to the Court of Appeal. The Court of Appeal dismissed the appeals in 2015. At this stage, the Court of Appeal considered that the figures on their own were insufficient to establish that claimants were unable to pay the fees and they were therefore unable to have access to justice. The Court rejected the argument that the fees were indirectly discriminatory and dismissed arguments based on the public sector equality duty. Unison then appealed to the Supreme Court on the 27 and 28 March 2017 and the decision was handed down on 26 July 2017.
The Latest Supreme Court Judgement
The Supreme Court considered and acknowledged that there has been a dramatic and persistent fall in the number of Employment Tribunal claims since the Fee Order came into force. The proportion of claimants receiving fee remission was far lower than the Government had anticipated, while the Lord Chancellors discretionary power to omit fees in exceptional circumstances had rarely been exercised.
The stated objective of the Fees Order was to transfer some of the running costs of the employment tribunals to users of the system. It was relevant that the order had made a much less contribution to Tribunal costs than expected.
The Court concluded that the Fees Order imposed disproportionate limitations on the exercise of EU-derived rights and was contrary to EU law and common law.
It was unnecessary for the court to reach a final conclusion on discriminatory issues that had been raised. The court set out its view that the Fees Order was indirectly discriminatory on the basis that Type B cases including discrimination claims attract a higher fee, and a higher proportion of women bring type B claims than bring Type A claims, women are placed at a particular disadvantage compared with men.
What happens next?
The government has stopped taking fees immediately and will begin the process of reimbursing all fees paid since 29 July 2013.
Will tribunal fees be scrapped altogether?
It is not clear whether this will be the case or whether the government will propose an alternative fairer more proportionate system where all users are asked to contribute towards the costs of running the system.
Watch this space!