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R (on the application of UNISON) (Appellant) v Lord Chancellor (Respondent) [2017] UKSC 51 - Supreme Court Ruling on Employment Tribunal Fees

In 2013 the Government introduced Employment Tribunal fees. As a result, any prospective Claimant was faced with having to pay up to £1,200 to commence their claim and see it through to a hearing. The rationale behind introducing these fees was to: transfer the costings of such claims from the tax payer to user, encourage settlement and, deter Claimants from bringing claims that were without merit. Unsurprisingly, the introduction of these fees led to a dramatic reduction in the number of Employment Tribunal cases. There are differing figures as to what the actual decrease in claims is, but some research suggests that over a three year period, the true reduction was around 79% (http://www.bbc.co.uk/news/uk-40727400).

UNISON brought judicial review proceedings challenging the introduction of these fees firstly in 2013 and secondly in 2014. In short, UNISON argued that the introduction of such fees was not a lawful exercise of the Lord Chancellor’s powers as they hamper access to justice, thwart the will of Parliament in granting employment rights and discriminate against women and other protected groups.

The Supreme Court have unanimously ruled that the government was acting unlawfully and unconstitutionally when it introduced the fees. The fees were described as posing a real risk to access to justice. A full consideration of their reasoning is set out below.

The Decision

It is helpful to note at the outset, as the Supreme Court did, the reason why Employment Tribunals were established. They were established to enable workers to enforce their employment rights against employers in an affordable and perhaps informal manner. It is also helpful to note, again as the Supreme Court did, that many claims in the Employment Tribunal involve much smaller sums of money than the aforementioned fees and indeed that some claims have no monetary value. Against this backdrop, it is unsurprising that UNISON brought proceedings.

In coming to their decision, the Supreme Court looked at whether the reasons for introducing the fees had achieved the desired effect - in short it did not seem that they had. The cost recovery rate was not as high as anticipated. Further, it was accepted by the Lord Chancellor that there was no basis for concluding that only stronger cases were being litigated. Furthermore, the number of claims settled seemed to have decreased rather than increased, perhaps owing to employers waiting to see if Claimants actually paid the upfront fees.

The Supreme Court came to their decision by looking firstly at the constitutional right of access to the courts. It was noted that this was inherent in the rule of law. It was also highlighted that it is too simplistic to say that employment tribunals only benefited the particular individual service user. Decisions could have much wider effects. The Court referred to Donoghue v Stephenson in this regard. In particular, paragraph 70 reads “The written case lodged on behalf of the Lord Chancellor in this appeal itself cites over 60 cases, each of which bears the name of the individual involved, and each of which is relied on as establishing a legal proposition. The Lord Chancellor’s own use of these materials refutes the idea that taxpayers derive no benefit from the cases brought by other people.” The Court then went on to say that the introduction of fees had a deterrent effect on bringing claims of low monetary value and therefore, the Fees Order prevented access to justice and was consequently unlawful. The Court commented that the Lord Chancellor’s discretionary power of remission offered little as it was supposed to be used in exceptional circumstances and these circumstances were endemic. This intrusion could not, in the Court’s opinion, be justified as a necessary intrusion on the right of access to justice as it had clearly not met the aims it intended to as set out in the paragraph above. As such, the Fees Order also rendered statutory rights nugatory and was unlawful under EU law. In the final part of the Judgment and in what could also be described as the final nail in the coffin of Employment Tribunal fees, Lady Hale dealt with the issue of discrimination in relation to higher Type B fees for certain cases which affected women more so and concluded this matter also in UNISON’s favour.

It will remain to be seen whether there will now be a increase in Employment Tribunal cases but, given the obvious link between the introduction of fees and decrease in claims, one could assume so.

The full judgment is available on BAILII

Rebecca Jones accepts instructions for Claimants and Respondents in employment cases. For further information please email Rebecca Jones.