The Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 introduced fees for bringing a claim to the Employment Tribunal (ET) and the Employment Appeal Tribunal (EAT). The stated aims of the Fees Order were to transfer part of the tribunals’ running costs from taxpayers to those using the service, to deter unmeritorious claims and to encourage earlier settlement.

Since that time, the public service trade union Unison has attempted to challenge the lawfulness of the new regime on the basis that the cost of an ET claim, which ranges from £390 for straightforward cases to £1,200 for more complex ones, makes it ‘virtually impossible, or excessively difficult’ for many people of modest means to exercise their right to bring an ET claim and also discriminates against employees with a protected characteristic.

In spite of a sharp decline in the number of ET cases brought, Unison had hitherto failed to persuade the courts of the merits of its case. However, permission was granted to appeal to the Supreme Court, which, in a unanimous decision that emphasised the right of everyone to have affordable access to the justice system, has ruled that the Fees Order is unlawful.

In the Court’s view, the Fees Order is unlawful under domestic and European law because it has the effect of preventing access to justice. Such access is a constitutional right inherent in the rule of law and ET cases do not merely provide a service of value to those who bring claims but are also important to society as a whole.

Court fees in the small claims court are related to the value of the claim, whereas the fees charged in less complex ET cases bore no relationship to the amounts sought and therefore acted as a deterrent to claims for modest sums or non-monetary relief. Furthermore, many such claims could be regarded as ‘futile or irrational’ in that the fees exceeded the sums claimed. Since fees were introduced, there had been a dramatic and sustained fall in the number of claims, particularly low-value claims, and having to pay a fee was the most frequently cited reason for not submitting a claim.

The Court noted that in many cases those on low or middle incomes could only pay the fees by making sacrifices and foregoing a reasonable standard of living. In those circumstances, they could not be regarded as affordable. The fees also contravened EU law guarantees of an effective remedy before a tribunal and imposed disproportionate limitations on the enforcement of EU employment rights.

Lastly, the fees were also indirectly discriminatory under the Equality Act 2010 because the higher fees for more complex claims put women at a particular disadvantage since a higher proportion of women than men brought such claims. The higher fee did not correspond to a higher workload being placed on tribunals and acted as an equal deterrent to unmeritorious and meritorious claims.

The victory has been hailed by the TUC as ‘a massive win for working people’.

In light of the Supreme Court’s judgment, the Ministry of Justice has announced that the Government will take immediate steps to cease charging ET fees and refund payments made since 2013.