Supreme Court declares employment tribunal fees | KPMG | UK

Supreme Court declares employment tribunal fees unlawful

Supreme Court declares employment tribunal fees

The Supreme Court has allowed the appeal by UNISON and found that the employment tribunal fees regime prevents access to justice, is unlawful and will be quashed. While good news in terms of providing access to justice, this may result in increased employee litigation for employers.

1000

Partner and Brexit People & Immigration Lead

KPMG in the UK

Contact

Also on KPMG.com

Supreme Court declares employment tribunal fees unlawful - image of lady justice with scales

Background

In 2013 the Employment Tribunals and Employment Appeal Tribunal Fees Order (the “Order”) introduced rules requiring an individual to pay a fee to issue an employment tribunal claim and a further fee for a hearing. Fee levels differed according to the claim brought. The purpose of this fees regime was to deter unmeritorious claims, increase the number of ACAS settlements and contribute to tribunal costs.

Since the Order was introduced, there has been a significant fall in the number of employment tribunal claims and the effect (most notably in respect of cost savings) of the Order has not been what was expected by the Government when it was introduced.

UNISON sought judicial view and for the Order to be quashed on the basis that it breached the EU principle of effectiveness by making it excessively difficult to exercise rights under EU law (i.e. access to justice).
 

Tribunal fees declared unlawful

The Supreme Court has allowed the appeal by UNISON and found that the Order prevents access to justice, is unlawful and will be quashed.

Lord Reed (who gave the principal judgment) highlighted the importance of the constitutional right of access to the courts as an essential element of the rule of law. It was concluded that the Order prevented access to justice as the fees were not set at a level everyone could afford, and also made it pointless to bring a smaller value claim (as the cost of the fees would outweigh the compensation sought), causing a drop in the number of claims.

Lord Reed also deemed the Order to be in breach of the Article 6 European Court of Human Rights (ECHR) requirement for restrictions on access to the courts to pursue a legitimate aim and proportionate aim. He argued that the fees are not proportionate to the sums at stake and therefore that the Order is unlawful under both EU and UK law.

Impact

The immediate outcome of this ruling is that tribunal and Employment Appeal Tribunal fees cease to be payable under the existing scheme. It is likely that the Government will issue a consultation paper to bring in a new, adapted, fee regime but we will have to wait to see what is proposed. All fees paid since 2013 will need to be reimbursed. How this will operate in practice is unclear and is likely to be burdensome to implement.

In addition it is uncertain what will happen (if anything) with regards to those claims that were not brought because of the fees being too high – arguments could be made, for example, that the timeframe should be extended to allow claimants to bring such claims.

While this decision is to be welcomed in the interests of access to justice, this is likely to be challenging for employers who had seen a substantial drop in employee litigation and may now face increased employee claims. We will have to wait to see whether a lower fee regime is brought in to mitigate this.

We will provide updates on future developments.

Next Steps

If you have any queries, please do not hesitate to get in touch with your normal contact or e-mail employersclub@kpmg.co.uk

 

Employment Law

Employment Law

Providing you with advice on typical problem areas, and analysis on significant developments in employment law.

Employers' Club

Employers' Club

Providing our members with personalised updates on the latest employee issues.

Connect with us

 

Request for proposal

 

Submit

KPMG’s new-look website

KPMG has launched a state of the art digital platform that enhances your experience and provides improved access to our content and our people, whatever device you are on.