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A Victory For The Rule of Law – Supreme Court Declares Employment Tribunal Fees Unlawful

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A Victory For The Rule of Law – Supreme Court Declares Employment Tribunal Fees Unlawful

Employees who have been hindered from bringing a claim against their employer in the Employment Tribunal because they cannot afford the fees were handed an absolute victory in July this year, when the Supreme Court in R (on the application of UNISON) v Lord Chancellor[1] ruled the fees unlawful. The finding is a salutary reminder that access to justice through the court system is the bulwark of ones fundamental legal rights.

Prior to the coming into force of the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013, (the Fees Order) on 29 July 2013, an employee could bring a claim in the Employment Tribunal and launch an appeal in the Employment Appeal Tribunal without having to pay any court fees.

Following the Fees Order, claimants were forced to pay between £390 and £1,200 to have a claim heard in the Employment Tribunal and £1,600 to bring an appeal in the Employment Appeal Tribunal.

The Supreme Courts decision is a perfect illustration of how judicial review can force the Government to abolish an unfair or illegal policy it has made.

The background to the Fees Order

Given that there will always be an imbalance of power between employers and employees, the government provides legislation to protect a minimum standard of employee rights, rather than leaving the relationship to be decided solely under freedom of contract.

EU law has further strengthened employee rights, and so far, the government has pledged to incorporate all EU employment legislation into UK law so any rights conferred on employees remain in effect after Brexit.

It stands to reason that for these rights given by Parliament to be effective, they must be enforceable in practice.

The Employment Tribunal (formally the Industrial Tribunal), was created following recommendations by the Donovan Report (the Report of the Royal Commission on Trade Unions and Employers Associations, Cmnd 3623) in 1968[2]. They were designed to provide an easily accessible, speedy, informal and inexpensive procedure for the settlement of employment disputes.

In January 2011, the Government published a paper entitled Resolving Workplace Disputes: A Consultation, in which it announced its intention to introduce fee-charging into Employment Tribunals and the Employment Appeals Tribunal.  The reason for bringing in fees was threefold:

  1. to ensure that those who were using the system contributed financially to it, thereby shifting some of the burden from the taxpayer;
  2. to incentivise early settlements;
  3. to prevent employees from bringing weak and/or vexatious claims.

The reason the Fees Order was challenged by way of judicial review

Any employee who wished to bring a claim in the Employment Tribunal or appeal a decision in the Employment Appeal Tribunal had to pay the fee unless exceptional circumstances applied.

Under the non-statutory guidance, published by Her Majesty’s Courts and Tribunal Service (HMCTS) to qualify for exceptional circumstances, there must be exceptional hardship.

Unpublished guidance to HMCTS staff states:

In considering whether an applicant cannot realistically afford to pay, it is not enough that it may be difficult for a claimant to pay the fee. It is reasonable that a person might need to forego (sic) other spending in order to pay the fee. Instead, in order to be entitled to remission, a person must be in a position where, realistically, they simply cannot afford the fee.

Since the fees were introduced, claims heard in the Employment Tribunal have substantially decreased by around 79%.

The trade union organisation, Unison, challenged the Fees Order by way of judicial review. Unison argued that the making of the Fees Order was not a lawful exercise of the Lord Chancellors 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.

All seven Supreme Court judges agreed with the Appellant.

The fees and access to justice

One of the pivotal elements of the case was whether the introduction of the fees limited claimants access to justice. Remember, the whole point of the Employment Tribunal and Employment Appeals Tribunal being set up was to make it easier for employees to bring claims against employers.

The decision itself outlines the principles of the Rule of Law and the role that being able to access the courts plays in maintaining it.

In essence, the Rule of Law is thus: There are three parts to a democratically elected government; Parliament, Executive and Judiciary.

Parliament exists to make laws for the society. Its members are elected by the people and are accountable to them. The courts job is to enforce the laws made by Parliament and at common law, which comes from the courts themselves. This includes ensuring that the Executive branch of the government carries out its functions in accordance with the laws made by Parliament and the Judiciary.

If people do not have access to the courts, then the Judiciary cannot enforce the laws that Parliament makes and the principles of the Rule of Law become a charade.

In a letter written in 1965 to the Treasury from Lord Gardiner (at the time the Lord Chancellor) put it like this:

(i) Justice in this country is something in which all the Queens subjects have an interest, whether it be criminal or civil.

 (ii) The courts are for the benefit of all, whether the individual resorts to them or not.

 (iii) In the case of the civil courts the citizen benefits from the interpretation of the law by the Judges and from the resolution of disputes, whether between the state and the individual or between individuals.

The judges of the Supreme Court also pointed out that access to justice has been recognised in English law since the Magna Carta of 1215.

Edward I version, made in 1297 states: Nulli vendemus, nulli negabimus aut differemus rectum aut justiciam or we will sell to no man, we will not deny or defer to any man either Justice or Right.

In the Unison case, the Lord Chancellor argued the only way to prove the fees were unlawful was to show they had prevented access to justice in specific circumstances. He also pointed out that the exceptional circumstances provision meant that the very poorest in society had the fees waived. Those who do not so qualify had some income over and above the minimum necessary to meet the essentials of life, and can therefore save the amount needed to pay the fees if they choose to do so. He stated that it cannot be said access to justice is denied, simply because a claimant made a choice between paying the fee and spending the money in another way.

The Supreme Court disagreed. It held that for the fees to be lawful, they had to be set at a level that everyone could afford. The sharp drop in the volume of cases heard in the Employment Tribunal since the introduction of the fees indicated that this was not the case.

The fall in the number of claims has in any event been so sharp, so substantial, and so sustained as to warrant the conclusion that a significant number of people who would otherwise have brought claims have found the fees to be unaffordable.

It was pointed out that further proof of this fact lay in the 10% of cases where a claim was notified to ACAS but no settlement resulted, nor were proceedings brought in the Employment Tribunal, as the claimant stated they could not afford the fees.

Lord Reed stated:

Fees must therefore be affordable not in a theoretical sense, but in the sense that they can reasonably be afforded. Where households on low to middle incomes can only afford fees by sacrificing the ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living, the fees cannot be regarded as affordable.

For these reasons (and others, including being unlawful under EU law), it was concluded that the fees did prevent access to justice and were therefore unlawful.

 

Why this case is so important

The Supreme Courts decision is naturally good news for employees. Those who previously paid the fees to bring their case before the Employment Tribunal or Employment Appeal Tribunal, are likely to have the fees they paid refunded.

But the case is also important in terms of the Rule of Law and the power of judicial review. It demonstrates that, as so perfectly put by David Allen Green, in an opinion in the Financial Times following the decision, what Parliament has given, Executive action cannot take away.

This case illustrates how important the separation of powers between the Legislature, Executive and Judiciary is, and the role judicial review plays in holding the Government to account.

Poland, a Western country and a member of the EU, has recently brought in reforms that allow the far-right-wing government to fire judges. This should serve as a warning that the Rule of Law is fragile, and must be protected by everyone who enjoys its benefits.

The fact that the British government has acknowledged and instantly acted upon the Supreme Courts ruling (by immediately abolishing the fees) demonstrates that the UKs legal and democratic system remains robust.

We should never take this for granted.

The clearest way to show what the rule of law means to us in everyday life is to recall what has happened when there is no rule of law – Dwight D. Eisenhower
Saracens Solicitors is a full service legal firm based in the West End of London. Our expert employment law department can assist and guide you on all matters involving employment. We also have an experienced civil litigation department who can advise and represent individuals and organisations in judicial review challenges. Please contact us on 020 3588 3500 for further information and advice.

 

 

 

[1] https://www.supremecourt.uk/cases/docs/uksc-2015-0233-judgment.pdf

[2] http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2230.1969.tb01225.x/pdf

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