In 2017, it fell to the Supreme Court of the United Kingdom (UK) to rule on the lawfulness of a system of fees introduced four years previously and payable by all those taking a claim to the employment tribunal or employment appeals tribunal (‘ET’ and ‘EAT’). Employment tribunals, or industrial tribunals as they were originally known, had first been created in the UK in the 1970s in furtherance of the aim of providing quick, easy and inexpensive access to justice for workers whose employment rights had been breached. As the relative importance of collective (trade union based) procedures and government inspectorates as means of enforcing labour law had decreased over the course of the ensuing decades, so the importance of the tribunals had grown.
Between 1972 and 2012/13, the number of cases brought before the tribunals increased more than ten-fold from 13,555 to 191,541. Concerned by the associated rise in costs, and in the belief that a significant number of those bringing claims were ‘vexatious’ in intent, the Government introduced fees in 2013of between £390 and £1200 per claim, varying in accordance with the nature of the claim. In doing so, it had three stated objectives: first, to transfer some of the cost burden from general taxpayers to those that used the system; secondly, to incentivise earlier settlements of disputes; thirdly, to dis-incentivise unreasonable behaviour, such as the pursuit of weak or vexatious claims. In furtherance of the ancillary aim of ensuring access to justice for those who could not afford to pay fees, a so-called remissions schemewas also introduced. This was perhaps best described as restricted in scope, applying only to those with very little by way of savings, earning less than a full-time minimum wage.
In consulting in 2011on its proposals to introduce employment tribunal fees, the Government employed a market framing of the matter at hand, characterizing the claimant as a consumer: the purchaser of ‘tribunal services’. A cost-benefit analysiswas conducted accordingly in a manner that admitted only one kind of benefit; namely, a financial one to the individual service-user. The manner of calculation thus rendered invisible and irrelevant any possible benefits to the individual claimant that were not financial in nature – including a sense of vindication or ‘justice done’ – and any wider benefit to third parties or society as a whole of the tribunal system. In the Government’s own terms:
‘[We assume] that there are no positive externalities from consumption. In other words, ET and EAT use does not lead to gains to society that exceed the sum of the gains to consumers and producers of these services.’
The courts were asked to consider the lawfulness of the fees order twice, in 2013 and again in 2014: in essence, to judge whether the order breached the principle of access to justice and/or specific provisions of equality law. On both occasions the claim of unlawfulness was dismissed. In the Court of Appeal in 2015, it was ruledthat it had not been demonstrated that the fee order constituted an interference with the right of effective access to a tribunal because it had not been shown that the fees were unaffordable. Evidence had been lead to the effect that the number of claims brought to the ET and EAT had fallen very dramatically following the introduction of fees, far further than the Government had predicted; however, there was no safe basis, Underhill LJ reasoned, for ‘an inference that the decline cannot consist entirelyof cases where potential claimants could realistically have afforded to bring proceedings but have made a choice not to’.
In the Supreme Court in July 2017, the lead judgement (watch the Supreme Court read it decisions here) was delivered by Lord Reed, with the unanimous agreement of his colleagues. Perhaps with a view to the enduring authoritativeness of the Court’s ruling post-Brexit, Lord Reed based his decision primarily on English common law rather than EU law, framing the matter at hand with reference to the fundamental principle of the rule of law. At the heart of that principle, His Lordship recalled, was the idea that society was governed by law. In order for the courts to perform their role of ensuring that laws were applied and enforced, people must have ‘unimpeded access’ to them. Where access was impeded, laws were liable to become ‘a dead letter’, democracy ‘a meaningless charade’. To characterise ET claimants as consumers and to focus solely on the costs and benefits accruing to claimants as individuals was to misunderstand these points. ‘The idea that bringing a claim before a court or a tribunal is a purely private activity, and the related idea that such claims provide no broader social benefit, are demonstrably untenable’.
Like the lower courts before him, Lord Reed found the Government’s objectives in introducing the fees order to be legitimate. Nonetheless, he ruled, respect for the rule of law dictated that the Government could ‘intrude’ on the right of access to justice only to the degree that it was ‘reasonably necessary’ to meet those objectives. Moreover, the question whether the fees impeded access to justice to an unreasonable degree had to be decided ‘according to the likely impact of the fees on behaviour in the real world’. It was necessary, for example, to bear in mind that the use made by workers of ETs was governed ‘more by circumstances than by choice’: someone who believed herself to have been unfairly dismissed or unlawfully underpaid might be under a ‘practical compulsion’ to seek financial redress.
When considering the deterrent quality of fees to a worker considering legal action, the question to be asked was whether payment of fees would necessitate the sacrifice of ‘ordinary and reasonable expenditure required to maintain what would generally be regarded as an acceptable standard of living’; moreover, this should be judged over a period of time and not according to a snapshot view of a worker’s income and expenditure in a single month. It had also to be borne in mind that many claims brought in ETs did not seek anyfinancial reward; many others were for very modest amounts; and, in any case, only around half of claimants who succeeded in obtaining an award ever received payment of that award in full.
The Supreme Court decision contrasts starkly with the approach of both the Government and the Court of Appeal. Having adopted a market framing of the tribunal system, characterising claimants as consumers, the Government argued that the Order was lawful because all potential claimants could afford to bring a claim if they so chose. For Lord Reed, what was at stake was nothing less than the integrity of our democratic constitution. Claimants must be recognised to perform a public service when bringing a matter to the ET and their ability to do so prized accordingly. ‘Fundamentally’, he concluded, it was because of the failure to consider the public benefits of tribunal claims that the system of fees was ‘from the outset destined to infringe constitutional rights’. In line with his rule of law framing, Lord Reed insisted that the matter of the propensity of the fees to deter claimants be judged circumspectly, taking into account the social realities of claimants’ situations, rather than reducing the matter to a calculation of likely financial costs and rewards.
Ruth Dukes, “UK Supreme Court Strikes Down Fee to File Labour Standards Complaints” Canadian Law of Work Forum (February 28 2020): http://lawofwork.ca/uk-supreme-court-strikes-down-fee-to-file-labour-standards-complaints/