After a landmark decision today by the Supreme Court, the Government now faces having to repay more than £27m in tribunal fees after the Supreme Court ruled against that fees were unlawful, and that the Government was acting unlawfully and unconstitutionally when it introduced the fees four years ago.
The then Lord Chancellor, Chris Grayling, introduced the fees in July 2013, despite widespread opposition from Trade Unions and law firms. A Ministry of Justice report earlier this year claiming that the fees were not preventing access to justice was widely criticised, with the Law Gazette cynically saying: ”3000-8000 could not resolve disputes and could not afford a tribunal – turns out there is a way to spin that.”
Public sector union Unison has continually sought to have the charges ruled unlawful and declared today’s successful challenge in the Supreme Court today as a ‘victory for workers’ rights’. Court Fees are expected to be waived immediately.
UNISON general secretary Dave Prentis said:
“The government is not above the law. But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work. The government has been acting unlawfully, and has been proved wrong – not just on simple economics, but on constitutional law and basic fairness too.
“It’s a major victory for employees everywhere. UNISON took the case on behalf of anyone who’s ever been wronged at work, or who might be in future. Unscrupulous employers no longer have the upper hand. These unfair fees have let law-breaking bosses off the hook these past four years, and left badly treated staff with no choice but to put up or shut up. We’ll never know how many people missed out because they couldn’t afford the expense of fees. But at last this tax on justice has been lifted.”
The Justice Minister Dominic Raab, in accepting the judgement said:
“In setting employment tribunal fees, the Government has to consider access to justice, the costs of litigation, and how we fund the tribunals. The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case. We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid. We will also further consider the detail of the judgment.”
This represents a huge step forward for access to justice for workers and we will update this page with HR reactions thoughout the day.
Rachel Suff, employment relations adviser at the CIPD, the professional body for HR and people development, said the facts suggest valid claims have not been heard by a tribunal:
“The judgement signals a welcome end to the current tribunal fee system. Given the staggering drop in claims since tribunal fees were introduced in 2013, it’s clear that the fees were denying access to justice for many people. Sadly, this suggests that some perfectly valid claims have never been heard.
“If we are to build more open, inclusive and tolerant workplaces then workers have to have the ability to enforce their employment rights and challenge discrimination. It is clear that, not only was the current fee regime failing to provide that opportunity for redress, it did not enjoy the confidence of employers either, as shown by a recent CIPD survey which showed just a third of employers believe the fee system should be left as it is.”
TUC General Secretary Frances O’Grady said the case was a massive win for working people against a ‘bonanza for bad bosses’:
“Congratulations to UNISON for doggedly pursuing this case. Today’s result shows the value of working people standing together in trade unions. Too many low-paid workers couldn’t afford to uphold their rights at work, even when they’ve faced harassment or have been sacked unfairly. Tribunal fees have been a bonanza for bad bosses, giving them free rein to mistreat staff. Any fees paid so far should be refunded as soon as possible.”
Enrique Garcia, employment law consultant with the ELAS Group, said employers needed to look at their employment law support provisions:
“The decision of the Supreme Court to hold the tribunal fees regime as unlawful is sending a shockwave through the employment law establishment. What the fees regime is replaced with is up for debate. It may be some form of system whereby the cost of lodging a claim will be lower, perhaps more in line with small claim fees in the County Court. However, it is difficult to see where the Government will find the legislative time for this when they have more important issues to contend with. Employers’ who have become acclimatised to managing staff with only a low risk of litigation, will have to immediately re-assess their HR and employment law support. They should ensure it includes full, guidance, support and representation should they be taken to tribunal.”
Peninsula Employment Law Director Alan Price said employers now have no choice but to get it right:
“The Court found that the Fees Order of 2013 prevents access to justice and discriminates against women and those with other protected characteristics. The fees were found to place women at a particular disadvantage because a higher proportion of women bring Type B claims than Type A so have to pay the higher fee banding. The government failed to justify this discrimination with their aims of transferring costs from tax payers, encouraging earlier settlement and stopping vexatious claims.
“This decision means claimants will no longer have to pay a claim fee and hearing fee to bring a case to tribunal. Along with transparency developments such as gender pay gap reporting, this could see employers facing an increasing amount of tribunal claims. What this means for the early conciliation process, introduced alongside fees, will remain to be seen but this process will be important to weed out future spurious claims. Ensuring employers are determining status correctly, applying correct employment rights to every member of staff and not subjecting individuals to unfair treatment is vital. Employers need to get this right to remove the risk of facing a tribunal claim and to avoid their business being scrutinised in public due to judgments now being published on the internet.”
“The evidence showed that the effect of the Fees Order was a dramatic fall in the number of claims and it contravened the EU law guarantee of an effective remedy before an ET. It was also indirectly discriminatory because the higher fees for discrimination claims put women at a particular disadvantage. This is because a higher proportion of women bring these claims than claims that attract lower ET fees. The Lord Chancellor previously gave an undertaking to repay all ET fees paid since 2013 if the Fees Order was found to be unlawful and the Government will need to set up a system for repayment. It is unclear what will happen where a claimant was successful in the ET and the respondent employer reimbursed the fees. We are likely to see an increase in ET claims, as fees will have to be abolished with immediate effect, and the Government will presumably now give some thought as to how it can implement a lawful scheme for ET fees, perhaps by introducing a scale of fees linked to the value of claims.”
Paul Quain, Partner, GQ Employment Law, said the judgement would be a ‘headache for the Government’:
“This judgment creates a real headache for the Government. With their plate full with the big Brexit related visa and employment law issues the Government has had no appetite to look at tribunal fees. The Government’s announcement that it will abolish fees is likely to lead to a significant rise in the number of tribunal cases, although they had fallen dramatically in the wake of the introduction of fees. This is something that some employers will not relish going forward, but this case has forced the Government’s hand.”
“The Supreme Court has made it clear that all fees paid between 2013 and now will have to be refunded by the Lord Chancellor’s Department. I understand that the Lord Chancellor has agreed to do so. This will be a painful exercise! Many successful claims will have had fees ordered to be paid by the Employer, and someone will need to go through all the decided cases since 2013. “There is a possibility (and we will have to wait and see what happens on this) that if people can show that they could have brought claims earlier, but did not because of the fees regime they might try to say that time should be extended for them to be able to bring a claim today. There is likely to be huge resistance to this, but it would be surprising if this tactic was not tried!”
Sam Murray-Hinde, Partner, Howard Kennedy said the ruling highlight the importance attached to access to justice:
“The ruling highlights the high level of protection that is afforded to access to justice. The consequence is that fees cease to be payable from today and the Government will need to refund millions of pounds worth of fees paid by Claimants since their introduction in 2013. However, it is not clear at this stage how this will operate in cases where the Respondent was ordered to reimburse those fees to the Claimant.”
Employment lawyer at Browne Jacobson, Rachael Jellema predicted employment tribunals were now set to rise:
“This is a potentially expensive day for the Government as it is reported that the £32m taken in fees will have to be paid back. It is also a potentially expensive day for employers as the sharp drop in tribunal proceedings over recent years may soon seem like a short period of respite as once again the number of employment tribunal claims look set to rise.”
Clare Gilroy-Scott, Partner in the employment team at Goodman Derrick, the City law firm said the decision would have a big impact on ‘gig economy’ workers:
“There is no doubt that this is a landmark judgment for all workers and employees. Perhaps the greatest impact will be for so-called gig economy workers – the Uber drivers, CitySprint couriers etc – who work on flexible, casual and intermittent bases. Many of whom are workers but, as we have seen from recent tribunal judgments, have been denied holiday pay or not been paid the national minimum wage. For these workers, who do not have guaranteed work or protection from unfair dismissal, bringing claims was risky enough, without the further barrier of a tribunal fee which may have exceeded the value of their actual claim. Businesses engaging people on flexible “gig” models may find that they face an increase in claims if they are incorrectly treating workers as self-employed and do not provide them with their entitlements to the national minimum wage and holiday pay.”
Tim Goodwin, associate at Winckworth Sherwood said the Government acted had unlawfully and that fees have had an enormous impact on access to justice:
“Today’s judgment is a real victory for those campaigning against fees. The Supreme Court has determined that the orders issued by Government ministers imposing fees exceeded the power that those ministers were given under the relevant Act of Parliament – so that order was unlawful. The Court’s unanimous decision that the fees have acted as a barrier to accessing justice and are indirectly discriminatory will force the Government to go back to the drawing board and think about how it can better fund the Tribunal system without cutting off employees’ access to justice.
“The introduction of fees for Claimants in the Employment Tribunals has had an enormous, deleterious effect on working people’s access to justice. Employees have to stump up fees of up to £1,200 to bring their claims, often for relatively modest sums. This has seen, in some areas, Tribunal claims fall by up to 80%. Far from dissuading workers from bringing hopeless cases, the fees have discouraged genuine litigants from pursuing their rights simply on the basis that they cannot afford to pursue their employer. This is reflected in the rate of claims that are won at Tribunal – which has fallen, as a proportion of all cases brought, suggesting that fewer meritorious claims are getting through. The Government’s response has been lukewarm.”
Beverley Sunderland, Managing Director, Crossland Employment Solicitors, said the decision was ground-breaking:
“This is a ground breaking decision for the UK. The Supreme Court has ruled that the Government acted unlawfully in introducing tribunal fees as it did not pass an act of parliament authorising the introduction of fees in circumstances where these fees have restricted access to justice. It is also indirectly discriminatory as it disproportionately affects more women and cannot be justified. The Lord Chancellor has undertaken to repay all fees already paid. The Government’s next move will be to try and introduce legislation to properly impose tribunal fees but as they do not have a majority and given the clear and unequivocal statistics of the impact of fees on the numbers of claims brought, it is difficult to see how any such legislation will get through Parliament as no MP, whatever their politics, is likely to vote for it.”
Stuart McBride, partner at UK law firm TLT, said businesses will be awaiting the Government’s response:
“Following today’s Supreme Court ruling that employment tribunal fees are unlawful, businesses will obviously be waiting to see the government’s response. It may be that it attempts to introduce a new, legally compliant regime in an attempt to limit the impact of the judgment. With no fees, in theory we could return to the position we were in four years ago, with a substantial increase in the number of claims employers have to deal with. But, it could be that a side-effect of tribunal fees is that there has been a cultural shift in the approach to tribunal claims, in which case the effect of this decision will not be as great as one might expect, at least in the short to medium term.”
Rhian Radia, head of the employment team at London law firm, Hodge Jones & Allen, said:
“This is a huge decision for employees and a costly one for the Government. Not only will the Government have to pay back tens of millions of pounds in fees, there could well be legal challenges from employees who were deterred from bringing claims with strong merits previously. I know of many such would-be claimants and I would welcome their being given the possibility of resurrecting their claims.
“I will be glad to see a return to the days of busy tribunals with employees being able to access justice pursuing their claims for equal pay and pregnancy/discrimination perhaps starting with claims by some female staff at the BBC. At the end of the day, the attempts at justification of tribunal fees have failed in favour of justice being served.”
Asha Wije, Legal Officer of GMB Southern Region said,
“When the Coalition Government initially consulted about its proposal to introduce ET fees, trade unions, lawyers and many others up and down the country highlighted the points on which the government has now lost this case. This has been a monumental waste of time and resources and, as always with the Tory government, it’s the ordinary working person who has had to suffer in the meantime.”
Paul Maloney, Regional Secretary of GMB Southern Region said,
“Since the day they were introduced, ET fees have acted as a barrier to accessing justice for thousands of ordinary working people. The labour manifesto unequivocally stated that it would remove ET fees. It’s very sad that it’s come down to the courts having to force the Tory party to address the issue. This government is in a mess over Brexit and now it’s in a mess over ET fees.”