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Landmark Ruling on ET Fees

One of the fundamental principles of law is the right of every person to have access to justice. Two days ago, in a ground breaking decision of the Supreme Court it was decided that requiring employees to pay fees to bring employment claims meant that that they had been denied access to justice over the last four years. A victory for justice.

In the landmark case of R (on the application of Unison) v Lord Chancellor the Supreme Court ruled that the Employment Appeal Tribunal Fees Order 2013 was unlawful and should be quashed with immediate effect.

Why did fees happen?

The Government attempted to put forward a number of justifications for the introduction in 2013 of fees ranging from £390 to up to £1,300. Little thought was given to the fact that the value of employment compensation for claims is generally low. The Employment Tribunal is not a place where substantial pay-outs of compensation happen very often.

The Government tried to argue that imposing fees would reduce the number of meritless cases being brought by ‘disgruntled’ employees. What actually happened was that since the fee regime came into force, the number of employment claims fell off a cliff and dropped by around 70%. Cases with good prospects of success were never pursued because of fees and it did not appear from the statistics that the cases which did proceed were any more successful claims. On the contrary. The proportion of successful claims has been consistently lower since fees were introduced and the proportion of unsuccessful claims has been consistently higher.

The Government also tried to argue that fees were a good thing because this would mean transferring the cost burden from taxpayers to the users of Tribunals. The irony here is that much taxpayers money was spent locked in a legal battle over fees which ended in the highest court in the land.

The Government argued that having fees would encourage settlement. That is not what happened on the ground. Quite the opposite. Some employers played a tactical game of refusing to engage in early conciliation feeling fairly confident in the hope that a claim would not follow as the statistics were showing the dramatic drop in the number of employment claims. In other words, there was even less incentive for employers to settle claims post fees.

Rule of law, dead letters and meaningless charades

In his judgement, Lord Reed felt it necessary to explain the importance of the rule of law and the idea that society is governed by law. He explained that Courts exist in order to ensure that the laws made by Parliament are applied and enforced. It follows that in order for the courts to do that, people must have unimpeded access to justice. Otherwise he said “laws are liable to become a dead letter” and “democratic election of Members of Parliament may become a meaningless charade”.

Respect for rights

Lord Reed’s judgement emphasised that people and businesses need to know that rights can be enforced and that where rights are breached consequences will follow. This has to be the case if employment relationships are to be based on respect for those rights.

Fees are sex discrimination

Lady Hale also found that the fee regime was indirectly discriminatory against women, because a higher proportion of females brought discrimination claims than men and, therefore, were prevented from accessing justice.

The Future

In practical terms, what does all this mean going forward?

We are reliably informed that for claims being issued as of 26 July 2017 fees are no longer payable. How you present your claim is less clear whilst the Employment Tribunal website has been suspended and claims cannot be filed online. The website states that claims have to be posted. Can they be presented in person at certain Tribunals? Hopefully yes for claims with imminent deadlines. The situation is slightly chaotic.

For those claims that have been issued since 2013, issue fees will have to be refunded. It has already been confirmed by the Lord Chancellor that this will be done with an estimated refund cost of £32 million.

But logistically how will this be achieved? Will it be up to Claimants and Respondents (who may have been ordered to pay issue fees having lost a case) to contact the Government for a refund? Or will Employment Tribunals lead the way with this? At a time when Employment Tribunals are already suffering from staff shortages and huge backlogs in managing claims….

What about the missing cases?

The most troubling thought for us though is about those cases that never made it to the Employment Tribunal between 2013 and now. Those strong cases seeking justice for something as wrong as discrimination.

Would it be just and equitable now to allow such Claimants to resurrect their claims which would normally be out of time since time limitation in employment cases is short. Will employees be able to argue that it was not reasonably practicable to bring their claims because of unlawful fees? Interesting times ahead.

There is no doubt that this week’s decision is one of the most important employment law decisions in the last 50 years.

We shall end with a quote from the Magna Carta of 1215 referenced in Lord Reed’s eloquent judgement : “We will sell to no man, we will not deny or defer to any man either Justice or Right”.