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Employment Tribunal Fees Found to be Unlawful

The UK’s Supreme Court has unanimously ruled that the current system of employment tribunal fees is unlawful and discriminatory.

Employment Tribunal Fees

The fees were introduced by the UK Government in July 2013 and have been the subject of a legal challenge by trade union UNISON since October of that year.

The fees charged for bringing an employment tribunal claim vary depending on the type of case. They started at around £160 for a type A claim (for example wage claims, breach of contract), and £250 for a type B claim (unfair dismissal, race and sex discrimination). There was also a further hearing fee of £230 for Type A and £950 for Type B claims. There was an additional £400 lodging and £1,200 hearing fee for cases progressing to the employment appeal tribunal.

Full or partial remission of fees was possible, depending on a number of factors including how much disposable capital the claimant and their partner have, their monthly income and how many children they have.

The Government had given a variety of reasons why the introduction of fees was necessary, including that they would transfer part of the cost burden of the tribunals from taxpayers to users of their services, deter unmeritorious claims and encourage earlier settlement.

However, UNISON argued that the fee system was not a lawful exercise of the Lord Chancellor’s statutory powers, because the prescribed fees interfere unjustifiably with the right of access to justice under both the common law and EU law, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups. 

Unlawful and Discriminatory

The case progressed through the courts and eventually reached the Supreme Court, where judges have unanimously allowed the appeal.

They found that the Government’s 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 and must be quashed. 

They also ruled that the Order is indirectly discriminatory under the Equality Act 2010 because the higher fees for type B claims put women at a particular disadvantage, because a higher proportion of women bring type B claims than type A.

The judges said that charging higher fees for type B claims was not a proportionate means of achieving the stated aims of the Fees Order. It had not been shown to be more effective at transferring the cost of the service from taxpayers to users, and in some type B cases (such as pregnancy dismissal) the higher fee did not correspond to a greater workload placed on the tribunal.

In addition, meritorious as well as unmeritorious claims might be deterred by the higher price, and there was no correlation between the higher fee and the merits of the case or incentives to settle.

Response to the Verdict

Commenting on the decision, David Isaac, Chair of the Equality and Human Rights Commission said:

"The right to justice must be based on the merit of your case not your ability to pay. Thousands may have been denied of this right and priced out of getting justice. The judgment of the Supreme Court is a damning verdict on the current regime. It is a licence to discriminate for employers and must be scrapped. The law only works if people know that it is a fair and just system and the biggest and strongest will not always win."

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