Employment tribunal fees challenge dismissed by UK Court of Appeal

Lord Justice Underhill said that in order to be successful, UNISON had to be able to provide concrete evidence that the level of the fees had actually prevented some people from bringing cases against their employers or former employers to the employment tribunal. A case based on the mere fact that claims had declined since the introduction of the fees "cannot succeed by itself", he said.

The judge did, however, say that he had "a strong suspicion that so large a decline [in cases] is unlikely to be accounted for entirely by cases of 'won't pay' and that it must also reflect at least some cases of 'can't pay'". This should be reflected in the policy review currently being conducted by the government, as announced by the Lord Chancellor in June, he said.

The judge also dismissed additional arguments by UNISON based on indirect discrimination and the public sector equality duty.

UNISON has already applied for permission to appeal against the decision to the Supreme Court. Dave Prentice, the general secretary of the union, said that its "fight for fairness at work and access to justice for all will continue until these unfair and punitive fees are scrapped".

However employment law expert Christopher Mordue of Pinsent Masons, the law firm behind Out-Law.com, said that the fee regime had been welcomed as a "much-needed intervention" for employers, as allowing free access to tribunals had exposed many businesses to "significant cost and time in defending unmeritorious or speculative claims".

"The tribunal fee regime is not the only reason for the reduction in the number of tribunal claims being brought," he said. "The Acas early conciliation process is also working well for employers, giving them a chance to resolve disputes even before they reach the tribunal. Nonetheless, employers will welcome this further rejection of UNISON's challenge and will hope that the government's review of the fee regime does not result in significant changes which could see the number of claims starting to rise again."

Tribunal fees, payable in relation to claims brought to an employment tribunal or the Employment Appeal Tribunal (EAT), were introduced on 29 July 2013. Parties now have to pay an upfront fee to raise a claim, followed by a further 'hearing fee' once the case is referred to a tribunal. Flat fees apply to EAT cases, and a remission system operates to exempt people on low incomes from having to pay the full fees.

UNISON has argued that by requiring employees to pay a fee to bring a claim against their employer, the government has 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. It has issued two separate legal challenges against the government in the courts: the first, before the new regime was introduced, which was dismissed by the High Court in February 2014; and a second, based on official statistics, which the High Court rejected in December.

Lord Justice Underhill said that he was "tempted" by UNISON's submission that figures showing a dramatic drop in tribunal claims since the introduction of fees "speak for themselves". However, he concluded that there was "simply no safe basis for an untutored intuition about claimant behaviour or therefore for an inference that the decline cannot consist entirely of cases where potential claimants could realistically have afforded to bring proceedings but have made a choice not to".

"In my view the case based on the overall decline in claims cannot succeed by itself," he said. "It needs to be accompanied by evidence of the actual affordability of the fees in the financial circumstances of (typical) individuals. Only evidence of this character will enable the court to reach a reliable conclusion that the fees payable under the Order will indeed be realistically unaffordable in some cases."

However, he added that "the fact that the evidence put before this court has not satisfied me that there has been a breach of the effectiveness principle should not, and I am sure will not, preclude the Lord Chancellor from making his own assessment, on the basis of the evidence to which he will have access, on" whether the fees had in fact reduced some potential tribunal claimants' access to justice.

"The decline in the number of claims in the tribunals following the introduction of the Fees Order is sufficiently startling to merit a very full and careful analysis of its causes; and if there are good grounds for concluding that part of its is accounted for by claimants being realistically unable to afford to bring proceedings the level of fees and/or the remission criteria will need to be revisited," he said.