Employment tribunal fees are unlawful: where do we go from here?

The Supreme Court has unanimously allowed UNISON’s appeal against the legality of the Employment Tribunals and Employment Tribunal’s Fees Order 2013. It was held that the order is unlawful under both domestic and EU law and must be quashed.

In the lead judgment (by Lord Reed), it was held that the fees prevented access to justice and were not “affordable” for those on low to middle incomes. The fees did not vary according to the value of the claim (unlike fees for small claims) and was therefore a deterrent to claims for modest amounts or non-monetary remedies. The evidence before the court showed a considerable and persistent fall in the number of claims brought in the tribunal and fees were often cited as a reason for not submitting a claim.

It had not been shown that the order was the least intrusive means of achieving the stated aims of the order, namely to transfer the cost from taxpayers to users, to deter unmeritorious claims and to encourage settlement. Furthermore, the order contravened the EU law guarantee of an effective remedy before a tribunal.

In a further judgment (by Lady Hale), it was held that the order was indirectly discriminatory because the higher “type B” fees put women at a particular disadvantage because women bring a higher number of “type B” claims than “type A” claims. The charging of higher fees was not a proportionate means of achieving a legitimate aim.

All eyes will now be on the Lord Chancellor and how he responds to the judgment. It is unlikely that fees will disappear completely and a further consultation paper on fees is likely to follow in due course. Given the rather precarious position of the current government, any further order is likely to face considerable scrutiny.

The Lord Chancellor has already agreed to reimburse those who have paid fees since the commencement of the order in 2013. However, it is unclear how the paying party will seek to recover those fees and whether it will require the oversight of an employment judge.

The tribunal rules will have to be rewritten to cover the removal (and possible replacement) of the fees. The online claim form will also have to be amended.

The greatest impact will be on those who did not bring a claim because they could not afford the fees. Will the employment tribunal agree to extend the time limits in such cases? Furthermore, will those whose claims were struck out due to non-payment of fees and/or the refusal of a fee remission seek to reinstate their claims in light of the judgment?

Further guidance from the Lord Chancellor and Employment Tribunals Service is clearly needed.

Samuel Jones & David Curwen
July 2017