The Supreme Court has held that employment tribunal fees are unlawful.
Trade union UNISON brought judicial review proceedings arguing that the making of the Fees Order, which enabled tribunals to charge fees for the first time, was not a lawful exercise of the Lord Chancellor’s statutory powers, because the prescribed fees interfere unjustifiably with the right of access to justice under both domestic and EU law, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups.
Following a number of appeals the matter came before the Supreme Court who unanimously allowed the appeal ruling in UNISON’s favour.
The Supreme Court said that the Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice. Since it had that effect as soon as it was made, it was therefore unlawful and, the Court said, must be quashed.
Tribunal fees unlawful under domestic law
As far as domestic law is concerned, the Court said that the Fees Order is unlawful if there is a real risk that persons will effectively be prevented from having access to justice, which is their constitutional right, or if the degree of intrusion into access to justice is greater than is justified by the purposes of the Fees Order.
The Court noted that unlike small claims court fees, tribunal fees bear no direct relation to the amount sought and can therefore be expected to act as a deterrent to claims for modest amounts or non-monetary remedies (which together form the majority of tribunal claims). It said that the evidence before it showed that the effect of the Fees Order was a dramatic and persistent fall in the number of claims brought in tribunals, with a greater fall in the number of lower value claims and claims in which a financial remedy was not sought. Fees, it said, were the most frequently cited reason for not submitting a claim.
The Court said that the question of whether fees effectively prevent access to justice must be decided according to the likely impact of the fees on behaviour in the real world. Fees, it said, must be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. It said that where households on low to middle incomes can only afford fees by forgoing an acceptable standard of living, the fees cannot be regarded as affordable.
The Court went on to say that even where fees are affordable, they prevent access to justice where they render it futile or irrational to bring a claim, such as in claims for modest or no financial awards.
The Court accepted that the stated purposes of the Fees Order are legitimate aims but said that it has not been shown that the Fees Order was the least intrusive means of achieving those aims.
Tribunal fees contravene EU law
As far as European law is concerned, the Court said that the Fees Order contravenes the guarantee of an effective remedy before a tribunal, which is enshrined in European law. It, the Court said, it imposes disproportionate limitations on the enforcement of European employment rights.
Tribunal fees breach discrimination laws
The Supreme Court also ruled that the Fees Order is indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage, because a higher proportion of women bring type B than type A claims. The charging of higher fees was not, it said, a proportionate means of achieving the stated aims of the Fees Order.
The Court said that the Fees Order had not been shown to be more effective at transferring the cost of the service from taxpayers to users, and in some type B cases (for example involving pregnancy dismissal) the higher fee did not correspond to a greater workload placed on the tribunal.
The Court said that meritorious as well as unmeritorious claims might be deterred by the higher price, and there was no correlation between the higher fee and the merits of the case or incentives to settle.
The Ministry of Justice has announced that the government will take immediate steps to stop charging and refund the £32 million fees paid since the Fees Order was introduced in 2013.
Case reference: R (on the application of UNISON v Lord Chancellor