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Employment Tribunal and Employment Tribunal Appeal Fees declared unlawful by Supreme Court

1st August, 2017

Up until the Employment Tribunals and Employment Appeal Tribunal Fees Order 2013 (the Order) was brought into force, a claimant could bring and pursue proceedings in an Employment Tribunal (ET) and an Employment Appeal Tribunal (EAT) without being required to pay a fee.

ETs are a forum for claimants to pursue their employment rights and therefore, claims are commonly brought by employees and workers who have recently lost their jobs, and can include those who are paid low amounts. The tribunals are designed to deal with issues which may be of modest financial value, or even have no financial value at all, but are of importance to the claimant. However, the Lord Chancellor thought it necessary for fees to be introduced for three reasons:

  1. It would transfer the costs of running the tribunals from the tax payer to those using the system;
  2. The fee may encourage early settlement;
  3. The fee may assist in preventing weak and/or vexatious claims.

The Order referred to above introduced an issue fee, to be paid at the commencement of proceedings, and a hearing fee, to be paid prior to the final hearing. The fees are placed into two categories; Type A and Type B. Type A is the cheaper fee (issue fee of £160 and hearing fee of £230) for claims such as unlawful deduction from wages and redundancy pay claims. Type B is more expensive (issue fee of £250 and hearing fee of £950) and is applicable to the more complex cases such as unfair dismissal and discrimination.

The government’s position was that access to justice would be maintained by the introduction of a remissions scheme for those who could not afford the fees.

The fees have been controversial since their introduction given their potential to restrict access to justice and have been challenged from a very early stage by Unison. The Supreme Court have finally ruled on the matter in R (on the application of Unison) v Lord Chancellor [2017] UKSC 51.

During the hearing the Lords looked at various evidence which clearly demonstrates that the number of claims brought to the ET has dramatically decreased since the introduction of the fees.  Comparing with figures prior to the introduction of the fees, there has been a long term reduction in claims accepted by ET’s of around 66-70%.

In addition, research published by Acas demonstrated that the most frequently mentioned reason for not submitting an ET claim was that the fees were off putting.

In considering this evidence the Lords had to decide whether the fees prevented access to justice contrary to common law and EU law and if they did, were they a proportionate way of achieving the Lord Chancellor’s aims referred to above.

The Supreme Court ruled that the fees are, and always have been, unlawful and are not proportionate. Lord Reed commented 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 ab initio, and must be quashed.”

The effect is that ET and EAT fees cease to be payable and it is likely that fees already paid will need to be reimbursed by the government.

This is a much anticipated judgement which will have wide implications including whether if there is a future for the fee regime and if so, who will be paying those fees?

Claire Brook

Partner in Employment Law
Email: [email protected]
Tel: 01244 405575

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