UNISON has today succeeded in its long running battle to prove that employment tribunal fees are unlawful.

The Supreme Court this morning held that the order made by Chris Grayling, then Lord Chancellor, which introduced employment tribunal fees in July 2013 was an illegal exercise of his statutory powers under both UK and EU law. This is because the Employment Tribunals and Employment Appeal Tribunal Fees Order 2013 (the Fees Order) had the effect of preventing access to justice.

While there was no evidence before the Court that tribunal fees had prevented a particular individual from bringing a claim, the data reviewed by the Court was clear. Since the Fees Order came into force on 29 July 2013, there has been a dramatic and persistent fall in the number of claims brought, with a long-term reduction in claims of almost 70%. ACAS research indicated that a significant majority of individuals who sought ACAS’ assistance said they did not ultimately bring a claim because they could not afford the tribunal fee or because the value of the fee equalled the money they were owed. The Court was clear that it did not require conclusive evidence that tribunal fees have prevented people from bringing claims – it is enough if the Court believes there was a real risk that this is the case. The Court held that there was.

The Court further held that since the Fees Order had the effect of preventing access to justice as soon as it was made, it was unlawful from the outset (ab initio) and must be quashed. It follows from this that all employment tribunal fees which have been paid since July 2013 must be reimbursed to the claimants who paid them.

Another challenge brought by UNISON was that the higher fee payable for Type B claims (unfair dismissal, discrimination, whistleblowing, equal pay) was indirectly discriminatory against women and other protected groups. Although it was not necessary for the Court to rule on this point - given that it had already ruled that the Fees Order was unlawful ab initio - Lady Hale made clear that the higher fee for Type B claims was not justified.

The ruling raises a number of questions:

  • How much will the Government have to reimburse? Although figures of around £27 million are being quoted in the press, these do not take into account the application of the remission scheme (under which certain categories of claimants, principally those on low incomes, did not have to pay the full fee). It is actually the case that, as of June 2016, approximately £14 million had been collected in tribunal fees. It is likely that this amount has increased since then, to closer to £20 million. The process of reimbursement will be a complex and lengthy one. It will not be for the claimants to seek reimbursement but rather for the government to find the individuals and to repay the amounts (presumably with interest applied to ensure they are put back into the position they would have been had they never paid the fee).
  • Will there be a flood of cases arguing for an extension of time on claims which would have been brought if the tribunal fee system had not been in place? It is possible that some claimants might successfully seek an equitable extension of time on this basis if they can show, by reference to contemporaneous evidence – eg communications with ACAS or their lawyer - that the fee really did prevent them from bringing the claim. Given the need for hard evidence that this is the case, it seems unlikely that there will be a flood of cases.
  • Will a future government look to reintroduce a tribunal fee system? The Court did not outlaw the introduction of a tribunal fee charging system on principle. While it may be unattractive for the current government to do so, a future government could potentially introduce a fair tribunal fee structure. For a fee system to be lawful, it must not have the effect of preventing access to justice. The fees must be set at a level that everyone can afford. The Court made clear that this does not mean affordable in a theoretical sense but in a real sense. If people on low or middle incomes are having to make sacrifices of their usual, reasonable expenditure to pay the fees, they would not be regarded as affordable. Any proposed new system would require very careful scrutiny on this point and also on the points made by Lady Hale on the discriminatory impact of a two tier structure to ensure that it was not subject to challenge. It would also need to take account of the fact that, in certain circumstances (eg where the claim does not seek a financial award or is for a modest amount) a requirement that a fee be paid can make it futile or irrational to bring a claim, and thereby effectively prevent access to justice.