The Supreme Court today ruled that the Government’s introduction of employment tribunal fees was unlawful from their inception.  This decision means that with immediate effect workers are no longer required to pay fees to bring claims in the employment tribunal. A further consequence of the ruling is that any fees paid by claimants in the past must be refunded to them by the Government. It is estimated that the Government will have to shell out around £30m to cover these fees.

The Supreme Court’s decision came as a surprise because previous challenges to the fees system brought by the trade union Unison had failed in the lower courts. However, the Supreme Court was quite clear in its finding that requiring a claimant to pay fees of any sort in order to seek redress for work-related wrongs prevented access to justice under both English and EU law.

“The Fees Order is unlawful under both domestic and EU law because it has the effect of preventing access to justice. Since it had that effect as soon as it was made, it was therefore unlawful ab initio, and must be quashed.” Supreme Court

This ruling is good news for workers. Employment tribunal claims have been in significant decline since fees were introduced in 2013, and it was widely accepted that fees had effectively deterred workers from bringing tribunal claims. It remains to be seen whether the abolition of fees will lead to a reciprocal sharp increase in new claims.

One notable difference between the present day and the situation prior to the introduction of fees is the operation of the Acas early conciliation system, which became a mandatory part of employment tribunal proceedings around the same time as fees. Would-be claimants are still required to engage in conciliation prior to lodging a claim. While the fees system was in place, employers could negotiate from a position of strength safe in the knowledge that a worker was unlikely to continue with a claim given the daunting level of fees demanded. Now, employers have lost their major bargaining tool and will have to treat any conciliation exercise much more carefully.