The Supreme Court’s judgment on Employment Tribunal (ET) fees has been widely reported in the legal and mainstream press and has been described variously as momentous, terrific, ground-breaking and the most important employment law case of [our] lifetime.
In 2013 the Government introduced legislation requiring those who wanted to bring a claim in the ET to pay fees of up to £1,200. Their justification was threefold – that fees would transfer the cost of running the ET system on to those who used it; fees would incentivise early settlements and would dis-incentivise those perusing vexatious or weak clams.
The effect on the number of ET claims was nothing short of dramatic in that there was a long term reduction in the number of claims accepted by the ET of around 70% which by the Government’s own admission was much greater than was expected leading them to describe a “sharp, substantial and sustained fall….as a result of the introduction of fees.”
Unison have been challenging the imposition of fees since they were introduced on the grounds that the requirement to pay a fee to bring an ET claim was an interference with the right to access to justice and that the higher fees payable for discrimination claims were themselves indirectly discriminatory against women (who tend to earn less than men so will find it harder to afford the fees and who are more likely to be discriminated against by their employer thus are more likely to need to access to the ET).
Despite the High Court and Court of Appeal having rejected Unison’s arguments, the Supreme Court decided in their favour this week (surprising many commentators) and ruled that the Government’s requirement for individuals to pay a fee to the ET was unlawful.
In a stinging rebuke to the Government Lord Reed stressed the importance of the rule of law in society and of the role of the Courts who are charged with maintaining the rule of law. Parliament exits to make laws and the Courts exit to ensure that the laws they make are correctly framed, applied and enforced. In order for the Courts to perform this role society must have unimpeded access to them (my emphasis).
It is hard to argue with such reasoning.
It is also hard to argue with Lord Reed’s assertion that access to the Courts and the decisions of the Courts are of value to society at large and not just to individuals who happen to bring claims. For example – the factors relevant to determining whether an employee was fairly dismissed for misconduct were set out by the Employment Appeal Tribunal in 1978 in the case of Burchill v British Homes Stores. These factors are:
- Did the employer actually believe that the employee was guilty of misconduct?
- Did the employer have reasonable grounds on which to base that belief? and
- Did the employer carry out as much investigation as was reasonable in the circumstances of the particular case?
Those principles are still relevant to any person who finds themselves dismissed, and to any employer who wants to fairly dismiss, for misconduct. The value therefore of Mrs Burchill having access to justice and being able to bring her claim in 1978 extends to business and individuals today, almost 40 years later.
Further, the rule of law can only be maintained if there is a remedy against those who choose to ignore their legal rights and obligations – without the (financial) ability to seek that remedy the law is liable to become a “dead letter”.
The Supreme Court considered hypothetical claimants on low and medium incomes and considered whether they could afford to bring an ET claim having regard to the estimated income that the Joseph Rowntree Foundation estimates as being necessary to meet acceptable living standards. They calculated that these hypothetical claimants would have to save or delay spending on essential items such as clothing for between one and three and half months to be able to afford ET fees thereby “sacrificing ordinary and reasonable expenditure” in return for access to justice.
For these reasons (and other reasons not mentioned in this article – the judgment is 41 pages long) the Supreme Court unanimously decided that the requirement to pay ET fees prevents access to justice and is therefore unlawful.
For now ET fees are no longer payable and those who have already paid them are likely to be reimbursed but the Government may seek to introduce a new fees regime (if/when it isn’t distracted with Brexit negotiations), with fees set at a lower level. If that is the case the new scheme will come under very close scrutiny.
There will undoubtedly be an increase in the number of claims received by the ET now so employers should ensure their polices and procedures are current, that managers are properly trained in handling disciplinary matters and they should always seek legal advice before minor problems become time consuming disputes.