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"Good news" for employers as High Court rejects second tribunal fee judicial review

Out-Law News | 18 Dec 2014 | 3:59 pm | 4 min. read

The High Court has dismissed a second judicial review application by the trade union UNISON against the recent introduction of employment tribunal fees. Lord Justice Elias said that the union had not been able to provide evidence of "any actual instances" of individuals that had been prevented from making a claim by the introduction of fees.

been prevented from making a claim by the introduction of fees.

Employment law expert Ed Goodwyn of Pinsent Masons, the law firm behind Out-Law.com, said that the decision was "good news" for employers, who had already seen "a significant drop-off in speculative claims" since the fee regime was introduced last year.

UNISON was granted permission to appeal the decision, and said that it planned to seek "an expedited hearing" combining its appeals of both this case and the High Court's dismissal of an earlier application. In February, the High Court said that it was too early for UNISON to prove that the new regime breached certain principles of European law. The union began a second judicial review after "new evidence" appeared to show "a huge drop in tribunal claims", it said.

Fees to bring a claim to an employment tribunal or the Employment Appeal Tribunal (EAT) were introduced on 29 July 2013. Under the new structure, parties have to pay an upfront fee to raise a claim followed by a further 'hearing fee' once the case is referred to a tribunal. Claims are subdivided into the administratively simple 'Type A' claims, with fees of £160 and £230; and 'Type B' unfair dismissal or discrimination claims, with fees of £250 and £950. Flat fees apply to EAT cases. A remission system operates to exempt people on low incomes from having to pay the full fees.

UNISON had argued that by requiring employees to pay a fee to bring a claim against their employer, the government had reduced their access to justice. It has also argued that the fees particularly disadvantage lower paid workers and so indirectly discriminate against women and ethnic minorities. According to the most recently quarterly figures from the Ministry of Justice (MoJ), only 13,612 new claims were lodged between July and September 2014. Before fees were introduced, employment tribunals received an average of 48,000 new claims per quarter.

Giving the leading judgment, Lord Justice Elias said that the introduction of fees in order to help pay for the tribunal service was "plainly in principle a legitimate aim designed to ensure that the users of the service make a contribution towards its cost". "The only issue in my judgment is whether is does in practice make access impossible or exceptionally difficult," he said.

"[UNISON] still does not rely upon any actual instances of individuals who assert that they have been or would be unable to take claims notwithstanding that their income is too much to qualify for remission. Nor did it in its submissions focus upon hypothetical individuals as it did in the first case. Instead, the union essentially relies upon statistics to make good its claim, these being fuller than were available before the court at the earlier hearing," he said.

"The difficulty with the way the argument has been advanced is that the court has no evidence at all that any individual has even asserted that he or she has been unable to bring a claim because of cost. The figures demonstrate incontrovertibly that the fees have had a marked effect on the willingness of workers to bring a claim but they do not prove that any of them are unable, as opposed to unwilling, to do so," he said.

Moving on to look at the indirect discrimination point, the judge said that the question was "whether the difference in the fee [between Type A and Type B claims] is justified, rather than whether any fee is justified".

"The rationale for the distinction between category A and B cases is that those subject to level A fees are in general likely to take less time than claims falling within category B and therefore use fewer resources ... In my view, the explanation given is consistent both with the reason for imposing the fees in the first place and with the nature of the claims falling within the two groups. In my judgment, it is legitimate to fix the fees by reference to the service – in the sense of court resources – provided," he said.

"I have no doubt that each of the objectives relied upon in this case is a legitimate one and that the scheme taken overall, particularly having regard to the arrangements designed to relieve the poorest from the obligation to pay, is justified and proportionate to any discriminatory effect. Moreover, the costs are recoverable, in general at least, if the claim succeeds," he said.

"UNISON's claim that the fees were indirectly discriminatory failed on the statistics," said employment law expert Ed Goodwyn. "The court found that all the figures which had been canvassed in the proceedings were to a greater or lesser extent unreliable."

"What the ruling will do, though, is bring tribunal fees in Scotland higher up on the devolution agenda. The Smith Commission suggested that Scotland would review employment tribunal fees and word on the street is that the left-leaning Scottish government will significantly reduce these - which may in turn lead to jurisdiction shopping. The UK government says that it is keeping fees under review but it is likely that we could soon see a two-tier system, where tribunal claims are cheaper in Scotland than in England and Wales," he said.

Powers over the management and operation of "all reserved tribunals ... other than the Special Immigration Appeals Commission and the Proscribed Organisations Appeals Commission" are among the powers planned for devolution to Scotland under an agreement brokered by Lord Smith of Kelvin last month.

The decision has also left it open to the union to perhaps bring a third attempt at review, if they can bring examples of particular individuals not being able to bring their claim because of the fees regime, Goodwyn said.