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Back to the future for employment tribunal claims

26 Jul 2017

The Supreme Court has allowed the worker’s union UNISON’s appeal that the current system of fees in the Employment Tribunal and the Appeal Tribunal is unlawful.  This decision is extremely significant for claimants who have been dissuaded from bringing claims (as statistics clearly show) against their employers because of the financial cost.  Prior to the introduction of fees in 2013, claimants were able to bring claims without incurring a fee.

The government’s reasons behind the introduction of fees were threefold: 1) to transfer costs from the taxpayer to users of the Tribunal system, 2) to encourage early settlement, and 3) to discourage claims without merit.

UNISON argued that the prescribed fees interfere unjustifiably with the right of access to justice – under both the common law and EU law.  It also argued that the fees were discriminatory against women and other groups protected by discrimination legislation.

Prior to the introduction of fees, statistics show that most claims were for modest financial sums, the highest being for less than £5,000 for discrimination claims.  Other claims were for much less, and some for no financial remedy whatsoever, for example, workers seeking declarations that they are employees or a claims that employees have not been allowed to take rest breaks.

The effect of fees on claims from 2013 is clear – there was a dramatic and persistent reduction in the number of claims brought in the order of 66 to 70%.  A report subsequently commissioned by Acas cited fees as the main reason claimants did not bring claims, and the cost of pursuing claims would cost as much or more than the value of the claim itself.  This group represents nearly 8,000 would-be claimants.  The government and Lord Chancellor dismissed this, stating that “cannot afford to pay” meant that claimants could afford the fees if they were prepared to cut other areas of non-essential spending.

In terms of deterring claimants from bringing unmeritorious claims, statistics from various official sources show that the proportion of successful claims was, in fact, lower, and the proportion of unsuccessful claims was higher. As for encouraging earlier settlements, again the statistics show no overall increase in the proportion of claims being settled early. These findings were blows to two of the government’s major reasons for introducing fees.

The Supreme Court decided that, on the evidence available, the fees were not set at a level that everyone could afford.  The fees also discriminate against protected groups, who bring the majority of discrimination claims, and that deterring discrimination claims is in itself discriminatory.  It added that fees must be reasonably affordable and must not require claimants to sacrifice ordinary expenditure in order to bring a claim. The fee remission scheme for poorer claimants was also found to be too restrictive in scope. For all these reasons, the Court found that fees are unlawful.

The Supreme Court identified that many of the rights enforceable in the Tribunal are derived from EU law, and therefore any restrictions on the right of access to the Tribunal to enforce those rights fell within the jurisdiction of EU law. The Court found that fees do impose restrictions on claimants to exercise their EU rights, and therefore under EU law the fee system is also unlawful.

This decision by Supreme Court shows that the judiciary is not afraid to take a stand against the government on matters which restrict an individual’s right to access justice, and that both our own domestic law and EU law have within it the necessary protections to allow the judiciary to arrive at such decisions. On the face of the decision, it remains to be seen if the claimants who have paid fees will be fully reimbursed – the Supreme Court has invited the parties to make further submissions with regards to appropriate relief.

If you have any questions about the ruling, or want to speak to an expert about defending or bringing a claim, please contact us or call 0161 838 7851. 

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