Employment tribunal Fees-Another Twist of the Knife

Today High Court fees are increased by up to 600%, leading Michael Reed the Legal Officer Employment at FRU to quip on twitter

“Can I just say that when we told MoJ employment tribunal fees were disproportionate compared to court fees, this wasn’t what we had in mind”.

Pricing claimants out of the courts has severe implications for access to justice but my concern today is with a decision of the Employment Appeal Tribunal reported last week, L Goldwater & Others -v- Sellafield Ltd.  This was a decision of HHJ Shanks on the papers about a cost application for the recovery of the £1,600 fees paid by the employees for the privilege of successfully correcting the error of an employment tribunal judge (where they may have paid a fee of at least £390), on a claim for shift allowances.  It is not clear from the original judgment how much money was at stake, but there appear to be 16 claimants affected.

The original reserved decision allowing the appeal was handed down on the 26th November, and Thompsons solicitors on behalf of the successful appellants, made an application under rule 34A(2A) of the EAT Rules for the respondents to pay the £400 issue fee and the £1600 hearing fee.  Rule 34A(2A) states

“If the Appeal Tribunal allows an appeal, in full or in part, it may make a costs order against the respondent specifying that the respondent pay to the appellant an amount no greater than any fee paid by the appellant under a notice issued by the Lord Chancellor”

Eversheds solicitors, on behalf of the respondents made written submissions as to why the fee should not be paid even though they had comprehensively lost the appeal.  No doubt they were encouraged to be inventive in their submissions by recent decisions of the EAT where successful appellants have not had a cost order for the fees made in whole or part in their favour such as Look Ahead Housing -v- Chetty.  In that case an appeal was successful but the EAT judge exercised a residual discretion not to order the fee to be paid by the losing party in the appeal.  Eversheds submissions were:-

  1. The appeals were not wholly successful.  This is described as false and “almost disingenuous” and any fair reading of the original judgment in November would be that the Appellants had won.
  2. There is no entitlement to an order.  The judge has a wide discretion and it was “perfectly appropriate and reasonable” for the respondent to resist the appeal.  These submissions were rejected on the basis the Appellants had to bring the appeal to correct the employment judge’s error.  Incidentally, I always considered it unfair that the parties had to pay for the Employment Judge’s mistake and having to pay a fee only compounds matters.
  3. The fees were not paid by the Appellants but by their union, the GMB and so no award can be made under Rule 34A(2A).

I think it is fair to say this is a particularly speculative argument turning on the most literal reading of the language of Rule 34A(2A), especially as HHJ Shanks notes the definition of “costs” in Rule 34(2) says

“… “costs” includes fees … incurred by or on behalf of a party … in relation to the proceedings …”

There was no dispute that the tribunal claims and appeals were supported by the Appellants trade union, the GMB, no doubt under the union’s legal advice scheme.  Free legal advice is one of the main benefits of union membership.  It is akin to legal expense insurance.  Many unions extended their schemes to cover the cost of fees when they were introduced in July 2013.  Just like legal expense insurance, all the schemes are subject to terms and conditions that vary, but may include continuing to pay union dues, meeting criteria as to the prospects of success, following advice from retained solicitors and payment of all costs and expenses if the member instructs new solicitors.  Nearly all schemes reserve a residual discretion to the union as to whether to support or continual to support a claim.  In Mardner -v- Gardner & another the HHJ Eady in EAT held that the fact that a party was insured was not a relevant factor to take into account when considering whether to award costs.  There were public policy grounds for holding that a Respondent should not benefit from the prudence of the Appellant in taking out insurance.

Incidentally, HHJ Eady exercises her discretion at the end of the decision to award the £1600 appeal fees to the Appellant.  Although it is not clear from the judgment, it may well be a reasonable supposition to assume that the appeal was supported by legal expense insurance and the fee ultimately paid by the insurer.  There is just a finding that the claimant had “incurred” the fee.

HHJ Shanks refers to the difference in wording between “incurred by or on behalf of” in Rule 34(2) for the definition of costs and the limit on the “amount” of costs which can be made under Rule 34A(2A) to “…any fee paid by the appellant”.  He finds that the Appellants paid no fees at all in this case and so the maximum order that could be made is nil.  He therefore dismissed the application for fees to be paid whilst pointing out his decision is confined to Rule 34A(2A) and did not affect Rules 34A(1) and 34B-D about ordinary costs or expenses.

The reaction on twitter was immediate and damning.  The decision is wrong and leads to absurd results.  “Paid by” must include “paid on behalf of” or “paid by union/insurer/etc”. 

More importantly, the wording of Rule 34A(2A) is replicated in the Employment Tribunals (Constitution and Rules of Procedure) Regulations, 2013 Rule 75(1)(b), Rule 76(4) and Rule 78(c) where there  is reference to “tribunal fee paid by the receiving party”, “where a party has paid a Tribunal fee…” and “…a specified amount as reimbursement of all or part of a Tribunal fee paid by the receiving party”.  I anticipate it will not be long before a similar argument is made in the tribunal to resist a claim for fees when a claim is lost.  It will not just be union supported claims, but also legal expense insurance claims, No Win, No Fee lawyers or even solicitors who pay fees upfront in an emergency when a claim is going out of time before any retainer agreement is signed.

Until the matter is resolved (I understand the Appellants are considering an appeal), advisers should ensure they can demonstrate that the party claiming the fee has paid” it.

Ironically, if the case reaches the Court of Appeal where an inflated court fee will be paid there will be little or no argument that the losing party has to pay the winning parties costs and disbursements, including any court fee (although see Unison -v- Kelly for an exception).

Access to justice in employment cases just got even harder.

Rights At Work

“Workers and their families have always distrusted the law, and rightly so. It is not an instrument geared to our needs, and the people who administer it are unrepresentative, out of touch and antagonistic to our demands. Nevertheless, through political and industrial action workers have secured a set of legal rights which can be exploited.

Use the law only when industrial activity fails…Going to law is always a risky business-it takes time, it exposes individual workers to publicity and harassment, it hardens attitudes, and workers rarely win outright…You should only use the law when all prospect of solving an industrial problem through negotiation, conciliation or industrial action have vanished”.

Powerful words especially if you are a young, post-grad student about to start writing a thesis with the pretentious title “The Historical Development of Individual Employment Law”. They are from the first 2 paragraphs of “Rights At Work, A Workers Guide to Employment Law” published in 1979 by Pluto Press.  This book was found on the shelf of many union officials and quite a few labour lawyers, including myself in the 1980’s.

The words quoted above deliberately echo the famous opening words of “The Worker and the Law” by his teacher at the LSE, Bill Wedderburn

“Most workers want nothing more of the law than that it should leave them alone”

The author has just died, tragically young…HHJ Jeremy McMullen QC.  He was then an official in the General and Municipal Workers Union.  Subsequently he became a practising barrister, QC and Senior Judge at the EAT until 2013.  A pretty unique career path.

I leave it to others to write his obituary.  My purpose is to explore whether Jeremy was right and whether what he said above is still valid today.

In 1968 the Dagenham Fords Sewing Machinists (as in the film and now  musical with the earworm of a title tune, “Made in Dagenham”) went on strike for equal pay.  They wanted re-grading from unskilled B grade to semi-skilled grade C.  They settled for a wage rise to 100% of B grade but not the re-grading to grade C.  They didn’t get “equal pay” with their male colleagues.

In 1983, the Equal Value Amendment Regulations were introduced by a reluctant Tory government on the back of an adverse European Court judgment.  The first case brought to tribunal in 1984 was by the same Dagenham Fords Sewing Machinists making the same demand for re-grading. They argued their work was of equal value to that of the male semi-skilled grade C workers.  My firm was instructed by the union to act.  I was a lowly articled clerk taking notes at conferences and running errands.  Suffice to say the case was lost as was an appeal.  The women then went on strike in December 1984 and stayed out for 9 weeks closing down production. Arbitration through ACAS led to a ruling that they should be re-graded to grade C.

Ten years later, a union activist on the Underground was dismissed for allegedly assaulting a manager.  Now qualified as a solicitor, I was instructed by the union to take a claim to the tribunal for interim relief on the grounds of union membership and activity.  The case was won, mainly due to the brilliance of my client in the witness box.  London Transport refused to reinstate and so the tribunal made a continuation of contract of employment order (I remember being quoted in the Evening Standard, saying how outrageous it was that tax payers money was being wasted paying my client to tend his garden).  The Central Line then had a 1 day strike, the matter was referred to an ACAS conciliator and my client got his job back.  He is now Assistant General Secretary of the union.

At the Matrix Chambers Employment Seminar yesterday in a discussion about the increase in interim relief cases in whistleblowing claims, James Laddie QC asked me why there were so few trade union activities claims.  My recollection was that I probably ran on average 1 case per year but was only successful in one other case in 30 years (ironically where I instructed Jeremy).  The common factor in both cases was the performance of my client in the witness box compared with the employer’s witnesses.  Such claims are very hard to prove to the satisfaction of the tribunal and even if you win the employer doesn’t have to reinstate.  The employer also gets 2 bites of the cherry to get their evidence right as to why trade union membership or activities played no part in the decision to dismiss, “anyone is free to join a union” and “some of their best friends are union members”.  Tactically interim relief is often not the best option.

These are but 2 examples from my personal experience that seem to bear out Jeremy’s words. There could be many more.  Of course when Jeremy wrote those words we were in a very different economic world.  The labour market was completely different.  Union density is now 25.6% with 6.5m members.  In 1979 it was over 50% with 13.1m members.  For many workers today, the protection of strong union membership with terms and conditions set by collective bargaining, is never going to happen.  The law is the only protection of minimum standards of fairness and dignity at work.  The reality for many workers is insecurity and exploitation, with pay below the minimum wage, zero hours contracts, casualisation and unsafe workplaces.

Matters will only get worse if the Tories are elected in May with a working majority.  We are promised further restrictions in strike ballots with new minimum thresholds.  Osborne hinted at Davos there would be further changes to facilitate labour mobility (no fault dismissals a la Beecroft?)

And now you have to pay for the privilege of enforcing your rights.  If Jeremy was writing “Rights At Work” today he would add a sentence.  “And you have to pay a £1200 tax to enforce your rights”.

Passing new laws is not necessarily the answer.  What is?  I await your comments.

There is to be a Jeremy McMullen Memorial Fund to support female candidates for the Bar through work-experience and marshalling.  Donations can be made here.

HHJ Jeremy McMullen QC 1948-2015, trade union official, barrister, judge, friend, neighbour and occasional cycle to work companion, you will be missed but the debate about Rights at Work will continue.

Beware of Douceurs

On the 30th July, the Unison website carried news of a successful tribunal claim against Bromley Council under the headline

“Tribunal orders council to compensate workers offered cash to sign away rights”.  

This got my interest.  I read on.

“Bromley Council has been ordered to pay more than £64,000 in compensation to 18 of its staff after an employment tribunal had offered cash incentives to sign new contracts that took them out of existing collective bargaining agreements.”

A frisson of deja vu.  Were these not the exact same facts as in Wilson & Palmer & others v Associated Newspapers & Associated British Ports, a case with which I was very familiar.  This had led to the European Court of Human Rights case of Wilson and Palmer and others v UK [2002] IRLR 568.  That in turn had led the then Labour government to pass a series of amendments to the Trade Union and Labour Relations (Consolidation) Act 1992 including section 145B which provides;-

Inducements relating to collective bargaining

(1) A worker who is a member of an independent trade union which is recognised, or seeking to be recognised, by his employer has the right not to have an offer made to him by his employer if—

(a) acceptance of the offer, together with other workers’ acceptance of offers which the employer also makes to them, would have the prohibited result, and

(b) the employer’s sole or main purpose in making the offers is to achieve that result…

Unison kindly put a link to the decision at the end of the report. It is here:-


It makes very interesting reading.  Bromley made a series of concessions so the only issue for the tribunal was whether their sole or main purpose in making the offers was to achieve the prohibited result.  The prohibited result is defined thus:-

(2) The prohibited result is that the workers’ terms of employment, or any of those terms, will not (or will no longer) be determined by collective agreement negotiated by or on behalf of the union…

The tribunal had little difficulty in finding that Bromley’s purpose was prohibited as their own documentation and witness evidence confirmed that they intended to do away with the existing collective bargaining of terms of employment and to achieve this workers had to be induced to sign new contracts of employment where pay was not determined by collective bargaining.

Paragraph 54 of the decision is very revealing.

The Tribunal was surprised that neither the officers of the London Borough of Bromley, nor the officers of the unions involved, were aware of the provisions of section 145B of the Act during the course of the events described above.  Both parties may well have conducted themselves very differently had they been aware of these provisions…”

There is still a debate to be had as to the width of the term “purpose” in Section 145B.  On 7th March Eversheds published a briefing about Section 145B of the 1992 Act and a tribunal case in which they successfully acted called Wyer v Pembrokeshire County Council.    It is referred to in the Unison case.  http://www.eversheds.com/global/en/what/articles/index.page?ArticleID=en/Education/Education_HR_e-briefing_572_Do_trade_unions_have_a_monopoly_position

They boast that the Council was able to adduce detailed witness and documentary evidence to persuade a tribunal to take a broader view of the Council’s “purpose” in seeking to implement a new pay and grading structure outside the collective bargaining process.  However they caution that on similar facts another tribunal  in a case called Whitaker v Buckinghamshire County Council, accepted the trade union submission that you take a narrow view of the “purpose” and once the employer seeks individual worker’s agreement to changes to terms and conditions outwith the collective agreement, then Section 145B engages.

In Unison case, Bromley had the additional hurdle of offering to workers a financial incentive (or “Douceur” as the Court of Appeal referred to them in the Wilson & Palmer case) to sign the new contract giving up the right to have their terms of employment determined by collective bargaining.

With the Government encouraging the breakup of national collective bargaining arrangements and the recent changes to TUPE referred to in a previous article on Hard Labour by Jim Wright


we can expect a lot more discussion about the intricacies of section 145B and the other provisions introduced following the ECtHR decision in Wilson & Palmer.

Have the Government Made Another Mistake on ET Fees

In the Judicial Review brought by Fox and Partners in the Court of Session in Scotland in respect of employment tribunal fees, the Lord Chancellor conceded that Equal Pay claims were type A claims for the purposes of the Fees Order because they are complaints in relation to a breach of the sex equality clause  in terms of section 66 of the Equality Act 2010. This is despite the Fees Order saying they were Type B claims attracting the higher fee on issue and hearing.  It was suggested this was a drafting error and Ministers would want to amend the Fees Order.

I think I may have spotted a further drafting error.  I recently chaired a working party for the Employment Lawyers Association responding to the ACAS consultation on amending paragraphs 15 and 36 of the code of practice on Discipline and Grievance following the EAT decision in Toal and another v GB Oils Ltd UKEAT/0177/13DM.  If you are interested, you can find our response here http://www.elaweb.org.uk/sites/default/files/docs/ELA%20Response_ACAS%20consultation%20on%20Code_Discip_Griev_7Jan14%20%282%29.pdf

It is necessary for the Chair of the Association to approve any response before it is submitted.  He approved our response but asked me whether a fee was payable to bring a claim under Section 10 of the Employment Relations Act 1999, where an employer refuses to allow a worker to be accompanied by a companion of their choice at a grievance or disciplinary hearing.  I knew the answer to that was “yes” but I couldn’t answer the follow up question which was what was the level of fee.  I always assumed it was a type A claim.

I went to the fees order and was very surprised to see the claim was not listed in Table 2 of Schedule 2 as a type A claim, attracting the lower fee of £160 on issue and £230 for hearing.

This means that an worker wishing to bring a claim under S.10 of the Employment Relations Act 1999 must pay an issue fee of £250 and a hearing fee of £950.

Bearing in mind that the remedy for breach is compensation of an amount not exceeding 2 weeks pay and a weeks pay has the usual maximum of £450, a worker will have to spend £1200 to get back £900.  Of course, if they succeed they should have their fees paid by the losing party, but this is not automatically the case.

But it is worse, as a result of the decision in Toal  we now know that the word “compensation” in S.11 (3) of the Employment Relations Act 1999 requires the worker to prove they have suffered actual loss and nominal damages may be appropriate where no actual loss can be proven.

Type B cases are meant to be the more complex and costly claims.  I cannot believe the Government assessed S.10 claims are complex and so more costly.  Currently, who is going to speculate £1200 to win a maximum of £900 in compensation?  The right under S.10 becomes meaningless.

So is this a further example of the rushed nature of introducing the legislation on employment tribunal fees last July leading to errors in drafting?  Will the MoJ agree to remedy the error in the same way as they did with Equal Pay claims?