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Ruling on tribunal fees is a victory for common sense

It may be a simple judgement but it is a profound one. The UK Supreme Court’s judges have taken a dramatic decision that rights a wrong that many felt was harmful to the course of justice.

Lord Neuberger, President Lady Hale, Deputy President, Lord Mance, Lord Kerr, Lord Wilson, Lord Reed, Lord Hughes are to be commended for abolishing employment tribunal fees and restoring an element of justice.

The issue of the appeal was whether fees imposed in respect of proceedings in employment tribunals and the employment appeal tribunal were unlawful because of their effects on access to justice.

ETs have jurisdiction to determine numerous employment-related claims, most of which are based on rights created by or under Acts of Parliament, sometimes giving effect to EU law. They are the only forum in which most such claims may be brought. The EAT hears appeals from ETs on points of law. Until the coming into force of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, a claimant could bring and pursue proceedings in an ET and appeal to the EAT without paying any fee.

The trade union UNISON, supported by the Equality and Human Rights Commission and the Independent Workers Union of Great Britain, challenges the lawfulness of the fee order, which was made by the Lord Chancellor in the exercise of statutory powers.

It is argued that the making of the Fees Order was not a lawful exercise of those 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.

What was interesting was that the law agreed that the employer has the upper hand.

“Relationships between employers and employees are generally characterised by an imbalance of economic power. Recognising the vulnerability of employees to exploitation, discrimination, and other undesirable practices, and the social problems which can result, Parliament has long intervened in those relationships so as to confer statutory rights on employees, rather than leaving their rights to be determined by freedom of contract. In more recent times, further measures have also been adopted under legislation giving effect to EU law. In order for the rights conferred on employees to be effective, and to achieve the social benefits which Parliament intended, they must be enforceable in practice.’’

This is at the heart of why the tribunal fees were wrong in the first place.

I agree that ETs are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs, and those who are vulnerable to long term unemployment. They are designed to deal with issues which are often of modest financial value, or of no financial value at all, but are nonetheless of social importance.

There were three reason given for charging fees. First, fees would help to transfer some of the cost burden from general taxpayers to those that used the system, or caused the system to be used. Secondly, a price mechanism could incentivise earlier settlements. Thirdly, it could dis-incentivise unreasonable behaviour, such as pursuing weak or vexatious claims.

While it was fair enough to remove the burden from general taxpayers, fees must not prevent claims from being brought by making it unaffordable for those with limited means.

For those who argued for justice and fairness, this was the key element. Of course, remission and partial remission helped many but this was still not enough and the number of claims dropped significantly.

Since the Fees Order came into force on 29 July 2013 there has been a dramatic and persistent fall in the number of claims brought in ETs. Comparing the figures preceding the introduction of fees, there has been a reduction in claims accepted by ETs of the order of 66-70%. This suggests that many people have been denied fairness.

Another interesting matter came to light: a key aim of the introduction of fees was to encourage the earlier settlement of disputes.

The Review Report contains information about the number of people who contacted Acas and did not proceed to make an ET claim. That number, expressed as a proportion of the total number of employment disputes notified either to Acas or to ETs, has increased greatly since fees were introduced: from 22% in 2012/13 to 78% in 2014/15 and 80% in 2015/16.

Conciliation has helped more people to avoid the need to go to ETs.

However, those figures include cases where no settlement was reached, but where for other reasons (including the person’s view of the affordability of fees) the claim was not pursued.

It appears that the proportion of cases settled through Acas has slightly decreased since fees were introduced and some employers were delaying negotiations to see whether the claimant would be prepared to pay the fee.

But there was something loftier to consider.

“The constitutional right of access to the courts is inherent in the rule of law. The importance of the rule of law is not always understood. Indications of a lack of understanding include the assumption that the administration of justice is merely a public service like any other, that courts and tribunals are providers of services to the “users” who appear before them, and that the provision of those services is of value only to the users themselves and to those who are remunerated for their participation in the proceedings,’’ said the judges.

At the heart of the concept of the rule of law is the idea that society is governed by law. Parliament exists primarily in order to make laws for society in this country. Democratic procedures exist primarily in order to ensure that the Parliament which makes those laws includes Members of Parliament who are chosen by the people of this country and are accountable to them. Courts exist in order to ensure that the laws made by Parliament, and the common law created by the courts themselves, are applied and enforced.

There was one more aspect of the judgment that stood out:

“The value to society of the right of access to the courts is not confined to cases in which the courts decide questions of general importance. People and businesses need to know, on the one hand, that they will be able to enforce their rights if they have to do so, and, on the other hand, that if they fail to meet their obligations, there is likely to be a remedy against them. It is that knowledge which underpins everyday economic and social relations.’’

There is still much to take from this judgement, but it is a victory for the law and for those seeking justice at an employment tribunal. Balance has been restored and responsible employers have little to fear from that.