Tribunal fees ruled unlawful by the Supreme Court

Until the Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013 came into force in 2013, a claimant could bring proceedings without paying any fees. The Fees Order came into force in an effort to deter unmeritorious claims and allay the burden on taxpayers.

The appeal in the above case arose out of proceedings for judicial review, in which the appellant, Unison, argued that the Fees Order was unlawful because the prescribed fees restrict access to justice, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups.

In a unanimous decision, the Supreme Court has allowed the appeal. The Supreme Court held that the Fees Order is unlawful under both domestic and EU law because the fees prevent access to justice. The Supreme Court found that fees were most frequently cited as the reason for not submitting a claim and 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 further found that the Fees Order is unlawful because it contravenes the guarantee of an effective remedy before a tribunal under EU law, as it imposes disproportionate limitations on the enforcement of EU employment rights.

Finally, the Court held that the Fees Order is indirectly discriminatory under the Equality Act 2010 because a higher proportion of women bring type B rather than type A claims, and the higher fees under type B claims, therefore, put women at a particular disadvantage.

The Court could not find a correlation between the higher fees and the merits of a case and that meritorious and unmeritorious claims could be deterred by the higher fees.

The ruling means that the Fees Order has been quashed. The Government will be forced to repay approximately £27million to individuals who have paid tribunal fees since 2013. There won’t be recourse for employers who have paid employees fees as part of the settlement of claims, but, where unsuccessful Employers have been ordered to pay fees, they can expect to recover them. This will be a challenging job to administer.

Given that the Labour party manifesto proposed to abolish fees, politically, it may prove challenging for the Government to get any revised approach to Tribunal fees through Parliament and therefore this may be the last we see of Tribunal fees for at least this Parliament. Employers can expect to see an increase in Tribunal claims on the back of this decision. We consider the reduction in claims since 2013 was also influenced by the move to needing two years’ service to bring an unfair dismissal claim and, as a result, we don’t expect claims to return to 2013 levels.

For further information and assistance with any issues raised in this briefing, please contact Matthew Wort or your usual contact in our employment team.

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