Huge victory for workers as Employment Tribunal fees are quashed by the UK Supreme Court

This is a landmark decision for employment rights and constitutional rights. It affects virtually all workers and businesses in the UK.

Background

The government will now have to pay back over £32 million in Employment Tribunal fees that it should never have collected from claimants for over 3 years.

The fees were assessed as causing a long-term 70% collapse in the number of tribunal claims being brought.

While the Supreme Court did not object to the principle of ET fees, it has decided that the government cannot simply pick any figure they like and cannot charge a higher fee for discrimination cases.

It’s expected that a lower ET fee will make a comeback once the dust settles.

In many ways R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51 is a powerful, elegant document whose 42-pages deserve a full reading.

I have provided an overview below for anyone interested in the key points.

Some highlights from the judgment

In a unanimous judgment delivered mainly by Lord Reed, the Court acknowledged that the right of access to justice is “deeply embedded in our constitutional law” (§ 64).

This principle is fundamental to the ‘rule of law’ because courts exist to enforce the laws created by a democratically elected Parliament. For Courts and Tribunals to perform this role, people need “unimpeded access to them” (§ 68 and 76). Without this guaranteed right of access, the whole democratic system falters.

This is the reason why Courts are not like other forms of public services. Lord Reed rejected the government’s argument that employment claims only benefit private individuals and have no wider social benefit.

Tribunal claims provide a deterrent which helps to ensure that employment rights are respected in practice (§ 72). That’s the driving force behind Parliament’s creation of employment rights.

The right of access to justice can be violated by measures that make it harder to access courts or tribunals, even if such measures do not make access impossible (§ 78). This goes back to the well-established principle that rights are only real if they are effective (a theme which the Court visited in a recent human rights case that I’ve written about here).

Where Parliament authorises interference with the right of access to court, Courts will only permit such interferences to go so far as is necessary to achieve the objective of the provision (§ 80).

If there is a “real risk that persons will effectively be prevented from having access to justice”, and if Parliament has not clearly authorised such a move (§ 87) then ET fees will be unlawful.

Even with Parliament’s authorisation, the fee must be no more than is needed to achieve its objective (§ 88).

While this case was not based on human rights law, the European Convention was nevertheless relevant to the development of the common law in the UK. (Those seeking to abolish the ECHR and delete swathes of EU law may wish to take note that the common law can be a pretty dynamic beast by comparison…).

On the facts of this case, the number of ET claims had plummeted by such an extent that the Court concluded a significant number of people have been unable to bring claims because they cannot afford the fees (§ 91).

As Lord Reed put it:

Where households on low to middle incomes can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable.

Fee refunds for persons in “exceptional circumstances” could not fix the systemic un-affordability of the system and were of limited use (§ 95).

ET fees also discouraged low value claims by making it pointless to pursue them if the prospects of success were uncertain (§ 96).

While part of the aim of ET fees was to shift the cost of the service from the taxpayer to the persons bringing the claims, that aim could have been achieved by a lower fee (§ 99).

EU Law requires access to the tribunal to be effective in order to enforce rights derived from EU law. This is consistent with both the European Convention on Human Rights and the UK’s domestic common law (§ 110). ET fees impose a disproportionate barrier to the enforcement of EU rights and are unlawful on that basis.

Lady Hale’s concurring judgment

View this post on Instagram

Lady Hale to be new President of UK Supreme Court #law #diversity #judge

A post shared by Ben Amunwa (@benamunwa) on Jul 21, 2017 at 12:36am PDT

In a short concurring judgment, the Court’s incoming President, Lady Hale, found that the ET fees indirectly discriminate against women (among other protected groups) because they charge a higher fee for discrimination claims and a higher proportion of women are affected by the charge and put at a disadvantage compared to men.

This discriminatory effect could not be justified because although ET fees aimed to deter weak claims, shift cost to the users and encourage early settlements, there was no solid link between charging a higher fee and any of those objectives (§ 129).

Lady Hale observed:

Revenue is maximised by charging the right price, the price which potential claimants will see as constituting reasonable value for money. (§ 131)

The staggering fall in the number of claims suggested that the government had not reached the right price.

Next steps

The consequences of this decision are vast:

• The Employment Tribunal has apparently stopped accepting the payment of fees where claims are presented in person,  to give effect to the Supreme Court’s decision;
• Anyone who has already paid Employment Tribunal and Employment Appeal Tribunal fees are entitled to a refund and details on how to claim such a refund should be available soon. While some Claimants would have already recovered the fee from their employer if they have won, the fee should never have been paid in the first place and the government are arguably still liable for payback;
• One of the open questions is whether persons who chose not to bring a claim because they could not afford the fees can now bring a tribunal claim out of time. Such arguments may possible provided that there is contemporary evidence of the person’s means and decision not to claim being due to the fees.