Employment Tribunal Fees Are Unlawful And Will Have To Be Repaid By The Government

The Supreme Court has unanimously held that the introduction of the current fee system in the Employment Tribunal and Employment Appeal Tribunal - via a Fees Order in force from 29 July 2013 - was unlawful under both domestic and EU law, as it prevented access to justice and was indirectly discriminatory. The case is a significant instance of the rule of law restraining the power of the executive.

In light of the judgment, the Fees Order is therefore invalid and no fees will be payable under it going forward. The Government will also have to refund up to an estimated £32million to people who have brought employment claims since the fees were introduced.

Background

The Fees Order required a claimant to pay an 'issue fee' when a claim form was presented to an Employment Tribunal and a further 'hearing fee' shortly before the hearing of the claim. There were three stated policy objectives: to transfer some of the cost of the Employment Tribunals system from general taxpayers to system users; to incentivise early settlement by adding an element of cost; and to dis-incentivise unreasonable behaviour, such as bringing weak or vexatious claims.

There were two categories of fee:

type A claims (typically requiring little or no pre-hearing work and short hearings). Fees for this type of claim totalled £390; and type B claims (typically more substantial issues, requiring greater pre-hearing work and hearing time - unfair dismissal and discrimination fell into this category). Fees for this type of claim totalled £1,200. There were limited provisions for remission of fees, depending on a claimant's capital and disposable income.

The trade union UNISON had challenged the making of the Fees Order, which was the product of secondary legislation introduced by a Minister of the Crown, rather than an Act of Parliament. UNISON argued that it was not a lawful exercise of statutory powers, because (i) it interfered with access to justice (under both UK and EU law) and in doing so went further than was proportionate and (ii) discriminated unlawfully against women and other protected groups.

Judgment

The Court agreed. It held that the Fees Order would be unlawful, if there was a real risk that potential claimants would be effectively prevented from having access to justice or if the degree of interference with access to justice went further than was justified by the purpose of the Fees Order. The Court noted that the effect of the Fees Order had been a dramatic...