Unison to Judicially Review ‘Brutal’ Employment Tribunal Fees – Lauren Godfrey

21 June 2013 by

unison-logo-1News that Unison has applied for Judicial Review of the Government’s controversial plans to introduce fees in the Employment Tribunal has gone viral in the Labour Law community.  A key theme in the application is access to justice for working people, particularly women.

Unison has described the proposed fees of up to£1000 for individuals to bring a claim and have that claim determined in the Employment Tribunals as ”brutal”.

In summary, the basis of the legal argument is four-fold:

  • The fees make it difficult, to the point of impossibility, to enforce workers’ rights under European Community law.
  • There are no fees for enforcing domestic rights at a First Tier Tribunal – which is at a similar level to the Employment Tribunals – so the proposed fees offend against the principle of equivalence.
  • There was no adequate assessment of the proposed fees system by the Government in accordance with the Government’s Public Sector Equality Duty (introduced by the previous Labour Government).
  • The fees are indirectly discriminatory; that is although apparently neutral in expression or written form, the effect in practice would place women at a particular disadvantage, including in the application of the scheme for the partial remission of the fees.

Previous challenges to procedural bars in the Employment Tribunals

This latest application by Unison is not the first time that there has been an application for Judicial Review of procedural bars in the Employment Tribunal.  For example, the increase in the service requirement or qualifying period in order to claim unfair dismissal was challenged by Mrs Seymour-Smith and female putative claimants for unfair dismissal.  The application for judicial review resulted in a series of hearings and appeals (including before the ECJ) and culminated in the House of Lords finding that the increase to the qualifying period was indirectly discriminatory against women but could be justified as a proportionate means of achieving a legitimate aim: see R. –v- Secretary of State for Employment Ex p. Seymour-Smith (No.2).

Although strictly a narrow question was under consideration in Seymour-Smith, the approach adopted in that case may suggest significant obstacles to Unison’s indirect discrimination challenge to the proposed fees.  The question remains whether the other elements to the application for Judicial Review will tip the balance in Unison’s favour.

Why not a greater Union challenge?

Unison’s uncompromising language – describing the potential impact of the fees as ”brutal” – (see Unison press release) does raise the question of why the union response up to date has been so muted?  Although the TUC has been formally opposed (see this early article in the Guardian Newspaper), there has not been the union opposition that might have been anticipated by the Government.

It should be noted that many unions and the TUC (see TUC Report ‘Priced Out’) put in consultations opposed to the fees system.  However, Unison had also published details of a ‘loan’ scheme to enable members to pay the fees even before applying for partial remission: see Unison release on loan scheme.

A traditional challenge for unions has always been whether union membership involves an implied promise by the union to fund Employment Tribunal claims for members and many unions have developed quite rigorous and conservative funding criteria to ensure only viable claims are pursued.

Initially, many unions viewed the requirement to pay fees in the Employment Tribunal as a potential benefit that unions could provide for their members.  However, it is perhaps only after the Government put in place the machinery for the payment of the scheme, that unions are appreciating the full financial impact that such a promise to union members might cost unions.  Putting up union subscription rates in a recessionary climate is not attractive to even large unions such as Unison.

Lauren Godfrey is a barrister at Crown Office Row Brighton

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20 comments


  1. James Lawson says:

    If you have a system of ‘loser pays’ for ’employment tribunals’ you have no ‘equality of arms’. The deeper pockets of the employer and his ability to obtain expert practitioners prevails over the the minimum-waged factotum who loses his home as the price to be paid for hiring a lawyer to bring a TUPE claim and subsequently losing. In any event, how do you recover your costs from the minimum-waged Council House Tenant who has no liquid or liquifiable assets?

    ‘applicant pays’ is equally pernicious and one-sided for much the same reason. The fee structure as introduced would mean that you can fail to pay your cleaner, your housekeeper your care-assistant or whoever else you are paying the minimum wage to, secure in the knowledge that they simply do not have the financial means to pay to submit an ET1 to vindicate a right to claim for non-payment of wages under the ERA and a further fee to commence proceedings to effect recovery and then pay all over again if the employer wishes to appeal to the EAT.

    In any event, the application by UNISON seems like a ‘dead letter’ since the Scottish firm of Fox and Partners have beaten UNISON to the post by lodging a claim in the Scottish courts which is to be heard next week. The Lord Chancellor has agreed not to introduce the fees in Scotland until the outcome of the case.

    I have made my position quite clear in my responses to your questions and on re-reading them I doubt there is much to be gained by continually repeating them.

  2. Andrew says:

    James: I have just re-read your first post:

    “UNISON have an extremely powerful case. With each side having to meet its own costs in tribunal actions, the prohibitive fees . . .”

    Are you suggesting that either the taxpayer or the employer should meet the costs of the Claimant?

    If loser-pays is to be introduced it must be both ways – would you agree?

    And if the taxpayer pays one side’s but not the other’s costs I see certain Article 6 difficulties, the level playing field and all that.

    Perhaps you could clarify?

  3. Andrew says:

    No, James, a driver who is not at fault is not required to compensate the pedestrian or cyclist. In practice the insurance companies do not often fight the liability issue – but when they do they sometimes win and the claimant does not then recover costs from them.

    The two-year rule does not apply in cases of alleged discrimination – where the compensation is uncapped – of which the employer may also be guiltless.

    I am not suggesting that if the employer is not at fault the State should pick up the tab – I am saying that the employee should, it being s/he who initiated the process in respect of the tort which (ex hypothesi) did not happen – and preferably should be required to insure the risk – the employer to refund the premium if the claim succeeds. What could be wrong with that?

    I am also suggesting that – as in the common-law claims which you mention – there should be a sealed offer/Calderbank procedure to encourage settlements. What could be wrong with that?

    You have fallen for the old, old trade-union myths about the wicked capitalists. The fact is that employment cases are about human beings and their behaviour – often about the behaviour of two employees of the same employer, one of them seeking to hold the employer vicariously liable for the acts of the other – and sometimes one is in the right, and sometimes the other, and the one who is should not be left out of pocket. It really is as simple as that.

    And finally: these proposals are not about costs inter partes – that is for another day – but about court fees. I cannot for the life of me see why in an era when non-exempt claimants are expected to make a substantial contribution towards the cost of maintaining the court system the tribunals should be any different.

    1. James Lawson says:

      I am talking about the relationship between an insured driver and that of a pedestrian or cyclist and the way that the availability of insurance fixes the level of the duty of care as explained by Denning and Salmond LJJ in Nettleship v Weston and comparing the public policy objectives of that decision with the public policy objectives underpinning the rule that in Employment Tribunals, each side meet his or her own costs. The policy is the same. The normative function of the law is to protect the weak from the strong. Like the insured driver, the employer is in a financially stronger position than his erstwhile employee. To demand that the impecunious applicant, deprived of his job and his livlihood should underwrite the employer’s costs as the price of failing to prevail over the superior resources the employer may deploy against him is to use the law as an instrument of oppression that insulates the strong from the weak.

      The introduction of a system of fees the effect of which is to undermine the ability of an applicant to seek redress for unfair dismissal, or unlawful deduction of wages, or for any other claim achieves the same purpose. It insulates the employer from the independent scrutiny of his conduct and lays the foundation for the same culture of impunity that pre-dates the first Factory Acts of the 19th Century

      I am quite well aware that that the two-year embargo on initiating tribunal proceedings is disapplied in discrimination cases and that damages are not ‘capped as they are in unfair dismissal claims. The law here acts to deter discreditable conduct on the part of the employer to reflect the approbrium such conduct merits in the eyes of the public. The employer in such cases is moving beyond mere unfairness in dismissal into illegality and immorality reflected in the level of damages that a tribunal may award. However, the approach of the government in these cases is to further increase the charges payable to a victim seeking redress in order to discourage, what it alone sees, in the absence of evidence, as ‘speculative claims’. In other words, the greater the extent of reprehensible conduct on the part of the employer beyond mere unfairness in dismissal, the greater the financial penalty imposed upon the victim to subject such conduct to judicial scrutiny.

      The suggestion that raising legitimate concerns relating to the subversion of employment right is ‘falling for ‘Trade Union myths’ is an absurd statement which, without more, betrays a line of reasoning it seeks to impeach!

  4. James Lawson says:

    A further point worth mentioning is that as serious as these reforms are, they are simply ‘watered down’ versions of what the ‘Venture Capitalist’ Adrian Beecroft called for in his report to the Government who only admitted its existence after the Guardian Newspaper put it into the public domain forcing the Government’s hand in agreeing to publish it. The Same Adrian Beecroft who is a Conservative Party Donor and a major investor in the ‘payday lender’ ‘Wonga’!

    Fragile employment rights together with simultaneous benefit reforms restricting entitlement? – Que bono?

  5. Andrew says:

    James – you have still not explained why the employer who wins – and was therefore not at fault – should be left with his own bill to pay!

    1. James Lawson says:

      For the same reason that a driver who is not at fault is, as a matter of public policy required to compensate through his insurance policy a pedestrian or cyclist who comes into collision with his vehicle. The driver accepts the benefit of driving a car and accepts risk when he sets out on his journey. In the same way that a person who seeks to reap the benefits of running a business accepts the benefit or running a company, he accepts the risk of making poor hiring and management decisions. He is given two years to ‘get it right’. If he cannot do that in the generous time available to him or to take the trouble to familiarise himself with employment law that bends over backwards to accommodate him, then it is neither sensible to suggest nor reasonable to require the State to pick up the bill and indemnify him.

  6. stmorgan1 says:

    If I could interject an opinion in here, I would have to admit I have changed my mind about this topic. This is due to your persuasive words and sound commentary. Thank you for sharing.

    My page : http://www.encompass-consultancy.com/

  7. Andrew says:

    You are evading the point. If Mr and Mrs Bloggs have behaved fairly and the Tribunal says so why should they pay the costs they incur in persuading the Tribunal that they have done so? Why should not the person who falsely said otherwise indemnify them – to the last shirt stud?

    1. James Lawson says:

      There are several issues here. Firstly, there are two points at which weak cases are screened out. First, at the ACAS stage. Second, at the pre-hearing conference when it is examined by the tribunal judge. Secondly, if the applicant still proceeds to a full hearing in the face of judicial advice and loses, he is hit with a wasted costs order while the winning is refunded his fee.

      It is only the most determined of applicants with good arguable cases that actually manage to get to tribunals and even if they win, their damages are reduced if any contributory factors are present and what is left after it is taxed, pays their lawyer, assuming they can obtain the services of one who is prepared to work for next to nothing!

      Again, the idea of the small businessman regularly ‘taken to the cleaners’ by his employee is as endemic a myth as the so-called ‘compensation culture’ and the ‘Brussels Bureaucrat’.

  8. James Lawson says:

    The government has extended from one year to two, the qualifying period before an unfair dismissal rights may be acquired while the courts have limited out of existence the ability to seek a contractual remedy at common law for breach of contract. Moreover, the ability of an employee possessed of employment rights to vindicate a claim for unfair dismissal is contingent upon the production of a certificate from ACAS certifying that the statutory requirement of mediation has been complied with. It is therefore not unreasonable to infer from the government’s introduction of a system under which evidence arising out of ‘no fault’ negotiations between employer and employee to exist in addition to that required of ACAS is anything other than an opportunity for the employer to exploit the huge power imbalance he or she already possesses to evaluate the extent of his exposure to legal liability and to persuade an employee that any claim, no matter how justified is simply not worth pursuing.

    Mr and Mrs Bloggs are no more entitled to enjoy the befits of running a business in the absence of their obligation to act fairly than a driver is entitled to evade the inconvenience of a driving test before taking his car onto the road.

    The government has gone as far as it possibly can in restricting employment rights without directly contravening EU law from which many of them originate under the ‘social chapter’ that they are keen to ‘repatriate’ to Westminster and then destroy.

    You should be under no illusions whatsoever of the working environment the government is doing its level best to set up in this country and just who it is intended to benefit.

  9. Andrew says:

    James: even the screening process involves the employer in costs – why?

    Many employers are not big businesses. They are Mr Bloggs, Ms Bloggs, a few Bloggses, lr Bloggs Limited in which the Bloggses have sunk everything they have and guaranteed the overdraft. Such people have Article 6 rights too, and at the moment those rights are not respected.

    How would you feel about a Calderbank system to discourage litigation a l’outrance? If you are against that – why?

    Rechtsschutzversicherung sounds good – but we are about as likely to get that here as we are to fly to the moon by flapping our arms and that being so we must look for second best – which can only be loser-pays and preferably claimant-must-insure. It is after all the claimant who chooses to sue.

  10. simmo70 says:

    BROKEN BRITISH POLITICS- LIFE IS A LOTTERY UNDER SELF SEVERVING GOVERNMENTS
    Whislt Billions are wasted by Government ,when it comes to the Public’s Budget the Expenditure is miserly .Security in Life for any of us has been eroded by them .Our Health is paramount to our wellbeing but Hospital Deaths are common through negligence and cuts , one Home Secretary even bought contaminated Blood on the Cheap.Inferior imported prescription drugs another cut .Job Security went out of the window when V Cable introduced the Employment Law Reforms and made it easier to be sacked ,and once sacked then sanctioned on the JSA for 3 years.Our homes , 45,000 expected to be reprocessed in 2013.Evictions through the Bedroom Tax.Pension Fund Robbed of £5 billion. Retirement age increasing year by year.Even Death costs us money .They are the sad truths we live by whilst the Rich get Richer poverty increases . http://brokenbritishpolitics.simplesite.com

  11. The old proverb remains true: ‘He who goes to law holds a wolf by the tail.’ While laws, like a spider’s web, catch the fly and let the hawk go free.

  12. Andrew says:

    In a discrimination case, in which the compensation is not capped, and in which the law is complex, an employer other than a big business can face ruin if s/he loses; s/he needs a lawyer.

    But if s/he wins s/he is left with the bill to pay.

    The effect is that many cases are settled which would have failed at trial; and that is just as bad – do you agree, James – as cases not being brought which would have succeeded at trial. It is the negation of justice; it is legalised blackmail; it is a grossly unlevel paying field.

    If you get sued and win you should not lose out. It really is as simple as that.

    1. James Lawson says:

      Thank you Andrew.

      I would point out that the employer has available to him what his minimum-waged factotum is generally unable to afford – liability insurance to cover his legal costs. In Germany which has a similar tribunal system to ours (the ‘Arbeitsamt) in which both sides, like ours, meet their own costs, such insurance is compulsory (Rechtsschutzversicherung). Moreover, the employer here has an extra layer of protection open to him at the pre-hearing in which the tribunal judge (yes, they are now ‘Judges’ and no longer ‘Chairmen’) ‘screens out’ weak and unmeritorious cases before a full hearing of the case. Those that choose to continue are liable to have a costs order made against them – the tribunal judge has that discretion. Such orders act as a powerful deterrent to those who would choose to embark upon the blackmail to which you refer.

      That weak and unmeritorious claims are screened out before a full hearing is something both Adrian Beecroft failed to mention in his un-researched ‘rant’ of a report to the government. It is also something the government failed to mention when it misled the public in stating that the purpose of imposing charges in the first place was to ‘discourage ‘unmeritorious’ and ‘speculative’ claims. The government subsequently had to ‘come clean’ when it let slip that the real purpose of imposing charges was to effect a Treasury saving by making tribunals ‘self-funding’ rather than being funded by the taxpayer.

      The employer has no real excuse. Large employers do, of course, run large HR departments. But even small employers have a wealth of free information available to them.

      I am very much of the opinion that many of the situations to which you refer are grossly exaggerated and overstated by those in whose favour such a myth would tend to operate, namely, those who would seek to enjoy the benefits of running a business while doing their level best to avoid the burdens such undertakings carry with them.

      sentit commodum sentire, debet et onus et e contra!

      Regards

  13. James Lawson says:

    It is important to remember why employment tribunals were originally set up in 1964. Prior to that time, the only protection an employee had against the capricious acts of his employer was the collective action of his Trade Union. Industrial Tribunals (as they were then) were designed to provide an alternative means of dispute resolution to that of the courts. The worker and his representative could avail themselves of the protection of the early Industrial Relations Acts which Parliament gave employees as an alternative to the Nuclear option of his Union closing down a factory. There was no requirement to join a Trade Union as the only means of redressing the huge power imbalance that exists between employer and employee and the latter’s lack of bargaining power over his terms and conditions of employment and the employers ability ignore or override them.

    Tribunals were never designed to be courts. They were never meant to be a place for lawyers. However, as employment legislation began to develop, specialist advisers inevitably became involved as a means of redressing the imbalance that existed between the deep pockets of the employer and the impecunious employer who had lost his job. Each would meet their own costs simply because if the employee lost, he had not the means to meet the costs of the other side, moreover, it removed the ability of the employer from evading the protective legislation through the expedient of intimidating the worker into withdrawing his claim under the threat of losing his home as the price to be paid in costs recoverable from the employee if he loses,

    As employment legislation became more complex through transposition into English law of EU Directives such as the Working Time Directive, Acquired Rights Directive and other anti-discrimination Directives, we begin to see Tribunals ‘morphing’ into courts with specialist barristers and solicitors and with most remedies within the Employment Relations Act measured in multiples of ‘weeks’ pay’ the maximum available remedy available in certain cases would not meet the hourly wage of a specialist lawyer retained by the employee. Little wonder then that the employer rather than the employee becomes a much favoured client!

    In the casualised, minimum-waged employment environment that is now the United Kingdom workplace, navigating a highly complex piece of legislation such as TUPE is beyond the comprehension of the average minim-waged part-time cleaner on £6 per hour, or care-worker and other groups in this bracket that are most vulnerable to exploitation. Thus, for example, a failure to consult on a ‘relevant transfer’ required under Regulation 13 of TUPE attracts a maximum award of 13 weeks pay under Regulation 16(3), which the employer pays out of the ‘petty cash’ straight into the pocket of the applicant’s lawyer leaving the applicant not only out of pocket, but with a debt to his lawyer for the balance of his fee. Replicate this across the range of employment protection, and then add punitive fees to apply and bring a case before a tribunal, in order to make tribunals ‘self-funding’ and one can see the subtle way in which the government has neutralised at best and destroyed at worst, a whole swathe of EU-based employment law. In ‘playing up’ to the public, the crippling effect of tribunal claims on employers, while simultaneously emphasising the existence of ‘outrageous’ and ‘unmeritorious’ claims on the part of employees, the government machine has successfully created a climate of political and public opinion which has allowed for the subversion and destruction of EU-based employment rights which has been largely ignored by the Press, whose corporate sponsors stand to benefit, and by the legal profession itself who continue to do very nicely in propagating the ‘myth’ of the litigious employee to derive a profit from running ‘training days’ for their corporate clients with deeper pockets than their employees.

  14. Andrew says:

    Sorry, for god-diggers read gold-diggers . . . bloody keyboard!

  15. Andrew says:

    Why should they charge less than the courts for claims for similar amounts? It’s a historical anomaly that they don’t charge, and as in the courts fees will sort out the serious claims from the time-wasters and god-diggers. If there is an anomaly with the First-Tier Tribunal – charge there too. You get remission if you are on benefits or on your uppers (which itself leads to a lot of vexatious litigation, but don’t get me started on that) and if you have to pay and you win you will get it back from the employers.

    The real injustice is the absence of any proper loser-pays regime. As a minimum there should be a Calderbank system so that employers can protect themselves. Better: make applicants insure the defendant’s costs – the premium repayable by the employer if the claim succeeds.

    In principle nobody should be taken to court or tribunal, win, and be out of pocket.

  16. James Lawson says:

    UNISON have an extremely powerful case. With each side having to meet its own costs in tribunal actions, the prohibitive fees and the capping of available damages not only renders it impossible for the minimum waged to obtain a remedy, it is arguably in breach of Art 6 and 13 of the Convention.

    I would not, however, hold my breath in anticipation of a finding adverse to the government in this area which is governed as much by social policy as it is by law, and allowing the court to phrase the question on an application to the Court of Justice of the European Union for a preliminary ruling on the issue is fraught with difficulties unless the wording is agreed by the Union.

    There a much more effective option is for UNISON to petition the European Commission with a view to invoking its investigative function and powers under Art 258 TFEU. Moreover, it may alternatively or in addition invoke Arts 24 and 227 TFEU to complain to the Committee of Petitions of the European Parliament without the need to embark upon expensive litigation.

    Moreover, if each Union, acting in concert, were to obtain at least One Million Signatures, that would compel the European Commission and the Parliament to consider substantive changes to EU law to make it much more difficult for member states to subvert the rule of law in this way.

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