Employment tribunal fees were introduced for the first time in July 2013, and have been subject to challenge ever since. Over the course of the last 2 years, UNISON has launched 2 judicial reviews, both of which were unsuccessful in the High Court (see our alert of 17 December 2014).  It then appealed to the Court of Appeal and the matter was heard in June 2015. Judgment has now been handed down. Once again, UNISON’s challenge has failed.  It is reported that UNISON intends to appeal to the Supreme Court.

The basis of UNISON’s first challenge was that the fees were set at such a level, and the remission criteria were so restricted, that many claimants would be unable to bring a claim.  This challenge failed because it was deemed to be too premature; the fees had not yet had any impact in practice and UNISON was relying on predictions.  UNISON therefore launched a second challenge once the fees system was in place and evidence was available on the reduction in volume of claims since its introduction.  However, its second challenge failed on the basis that there was no actual evidence that any individual had ever asserted that they had not been able to bring a claim based on cost.

At the Court of Appeal 3 grounds of challenge were raised:

  • Breach of the effectiveness principle

It is a principle of EU law that persons who claim that their rights under EU law have been breached must have access to an effective remedy for that breach, ie the ability of a claimant to invoke the assistance of a court must be real, not hypothetical.

UNISON sought to argue that many claimants are unable to afford to bring claims in the tribunal and are accordingly denied effective access to justice. The Court of Appeal said that the basic question is whether the fee payable is such that a claimant cannot realistically afford to pay it. It said that this must be the focus, not considerations of the value of the claim or the cost of the service. It found that the test is whether any difficulty in paying is “excessive” so as to make payment of the fee impossible in practice.

UNISON relied on two different kinds of evidence in support of its challenge (1) evidence of the financial circumstances of notional individual claimants; and (2) evidence of the fall in the numbers of claimants since the introduction of the fees regime.

The Court of Appeal found that “It is quite clear…. that the introduction of fees has had the effect of deterring a very large number of potential claimants”. However, it went on to say that that by itself does not constitute a breach of the effectiveness principle. The Court of Appeal held that there has to be evidence of the actual affordability of the fees in the financial circumstances of typical individuals. It said that well-constructed cases of notional individuals could be used but that UNISON’s reliance on such cases in support of its challenge had actually been limited. The Court of Appeal went on to find that even if it were sufficiently proved that at least some individuals could not realistically afford to pay the fees, the relevant legislation implementing the fees regime did provide for remission in ‘exceptional circumstances’, and that a reasonably broad view of what constitutes ‘exceptional circumstances’ should be taken.

The Court of Appeal therefore found that there had been no breach of the effectiveness principle.

  • Indirect discrimination

UNISON argued that the introduction of fees is unlawfully discriminatory against persons in each of the protected categories recognised in EU and domestic law. However, gender (women) was focussed on as the paradigm protected category.

In its first indirect discrimination argument, UNISON alleged that the distinction between the level of fee for a Type A[1] claim and a Type B[2] claim was indirectly discriminatory as the proportion of Type B claimants who were women was higher than the proportion of Type A claimants. The Court of Appeal found that the charging of fees is not in itself discriminatory and there was justification for the charging of a higher level of fee for more complex cases.  The Court of Appeal also found that the fact that the distinction between Type A and Type B claims only reflects in a rough-and-ready way their different levels of demand on the tribunal’s resources is only one consideration to take into account in assessing whether those greater demands justify the disparate impact on female claimants.  The Court of Appeal further rejected an argument that the greater demand on tribunal resources by Type B claims was an unlawful ‘mere generalisation’.

In its second argument, UNISON claimed that there is discrimination  against women bringing discrimination claims as the proportion of women who bring discrimination claims is greater than the proportion of men.  The Court of Appeal agreed with the High Court’s reasoning in finding that the only relevant disproportion would be between women and men bringing Type B claims generally, and these claims are not limited to discrimination.

In its third argument, UNISON sought to rely on the difference between the proportion of Type B claimants who were women and the proportion of women in the workforce, and challenged the statistics relied on by the High Court which showed that the proportion of Type B claimants who were women was broadly equivalent to the proportion of women in the workforce, and that therefore there was no disparate impact.  The Court of Appeal rejected this submission and held that there could be no objection to the statistics submitted by the Lord Chancellor.

The Court of Appeal therefore found that the implementation of the fees regime was not indirectly discriminatory.

  • Public sector equality duty

UNISON alleged that the Lord Chancellor had breached his obligation to comply with the public sector equality duty (PSED).  It put forward a number of submissions in this respect but each was rejected by the Court of Appeal.

The Court of Appeal said that the High Court had found that the Lord Chancellor had taken a number of steps to ensure compliance with the duty, including creating an equality impact assessment (EIA), undertaking public consultation on the fee-charging structures and Civil Fee Remission Scheme, holding events at which a large number of organisations attended to put forward their views, and considering written responses received by a number of different wide-ranging groups.

The Court of Appeal was not prepared to find the PSED had been breached on the basis of  any of UNISON’s arguments which included that the EIA had failed to identify the likely discriminatory impact on women; that there was a lower than expected availability of fee remission; that there had been a failure to consult on the principle of charging fees; that the EIA had failed to consider the level of awards relative to fees; that the EIA had made a general assumption that both partners in a couple benefit equally from household income; that no evidence had been gathered as to the likely deterrent effect of the introduction of fees; and that the EIA had been wrong in expecting that the availability of remission would result in no inhibition on the willingness of claimants to bring claims.

The Court of Appeal’s decision brings to an end the first two chapters in the challenge to tribunal fees.  The outcome is not very surprising and is likely to  be welcome news for employers. However, it is reported that UNISON intends to appeal to the Supreme Court.  This means that the issue cannot be laid to rest just yet.  In the meantime, the Government’s own review of the impact of tribunal fees and its success in meeting the original financial, behavioural and justice objectives (launched June 2015) is ongoing and is expected to report before the end of 2015.  In addition, the House of Commons Justice Select Committee announced in July its own enquiry into whether the introduction of fees has adversely affected access to justice and whether the volume and quality of cases brought has been affected.  It has invited submissions which must be made by 30 September 2015. The outcome of these separate matters will be awaited with interest and will ensure that tribunal fees retain a high profile into 2016.