In R (UNISON) v Lord Chancellor the Supreme Court ruled that the fees regime as introduced by the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 (the Order) is unlawful. The Order was quashed. No fee is now payable for tribunal claims. As a result, all ET and EAT fees paid since the Order came into force on 29 July 2013 will need to be reimbursed.

The decision of the Supreme Court makes clear that the Order contravenes the common law right of access to justice which goes back to Magna Carta, as well as falling foul of EU law. The judgment highlights the importance of access to justice to the rule of law and the integrity of legal employment protections in society. If individuals are discouraged from bringing claims, there is a risk that legal rights will not be respected, as they will not be seen to be enforceable. There is also a benefit to society of the development of the law through tribunal decisions. The fees regime would limit that.

The Supreme Court accepted that the aim of deterring frivolous or vexatious claims is legitimate, but ruled that the “sharp and sustained” fall in the number of claims brought since 2013 was evidence enough to show that there was a real risk that the current fees have prevented access to justice. The Court determined that the current level of fees was, in practice, unaffordable for some people and that the fee remission system, given that it operates to remit fees so rarely, does not act to overcome this barrier.

Lady Hale (who becomes President of the Supreme Court on 2 October 2017) gave a separate speech setting out her view that the Order was also unlawfully indirectly discriminatory on the basis that a higher proportion of women than men bring “Type B” claims (which include discrimination claims) and these were significantly more expensive to bring.

On the day the judgment was handed down, the Government announced that it would immediately stop taking tribunal fees and would in due course repay all fees paid since the outset of the regime in 2013. It is not clear how the tribunal will deal with refunds, nor how it will handle cases where an employer has been ordered to reimburse the tribunal fees of a successful claimant. The Employment Tribunals have recently indicated that they hope to be able to make an announcement about thedetails of the refund scheme in September 2017.

There has been speculation about whether claimants who have been prevented from bringing their claims because of the fees will now be allowed to bring their claims. The tribunals would have to consider whether the fees regime made it “not reasonably practicable” to bring the claim within the three month time limit (in the case, for example, of unfair dismissal claims) or whether it would be “just and equitable” to extend time (in the case of discrimination claims).

On 9 August 2017, the Presidents of the Employment Tribunals issued case management orders staying all tribunal claims or applications brought in reliance on this decision in order “to await decisions of the Ministry of Justice and Her Majesty’ s Courts and Tribunals Service in relation to the implications of that decision”. On 18th August 2017 that stay was lifted. Arrangements for processing these claims are soon to be published.

The longer term impact of this very important decision remains to be seen. The Government may, for example, seek to put in place a more proportionate fees regime to achieve its aims of deterring frivolous or vexatious claims and transferring the cost of the tribunal service from taxpayers to users. Commentators have also speculated that employers may be asked to contribute to tribunal fees. But that is some way off. For the present, we are likely to see an increase in the number of tribunal claims brought by employees, as they may now be brought without incurring a fee. Employers should robustly check their systems and procedures to ensure that they are compliant with the law, and train managers to avoid situations that could lead to employment tribunal claims