This morning the Supreme Court gave its decision in the long-running litigation about the legality of employment tribunal fees. The Supreme Court has unanimously ruled that the government was acting unlawfully when it introduced the fees in 2013.
This is clearly one of the most significant (and surprising!) decisions in employment law in recent years.
Essentially, the Supreme Court held that the current fees regime is unlawful because the fees are not set at an affordable level and effectively prevent access to justice in employment tribunals. It also held that the fee regime imposed unjustified limitations on the ability to enforce EU rights (i.e. those claims based on EU law), and was thus unlawful under EU law. The Court also decided that the fees regime was indirectly discriminatory against women; claimants required to pay the highest fees, including £1,200 for a discrimination claim that goes to a hearing, are disproportionately female.
Prior to the introduction of the fees regime, access to employment tribunals was free of charge. The imposition of fees resulted in a dramatic decline (almost 70%) in the number of tribunal claims submitted each year, and a particularly marked decline in lower-value discrimination claims.
Unison, the public sector trade union, challenged the lawfulness of the introduction of the fee regime by way of judicial review. This challenge had previously been dismissed by the High Court and the Court of Appeal before Unison's ultimately successful appeal to the Supreme Court.
What does this mean for employers?
It remains to be seen what the full practical effect of this dramatic ruling will be.
The Supreme Court has quashed the 2013 Fees Order, meaning that claimants in employment tribunal cases cannot now be required to pay fees. Clearly the government will now have to think about whether any fee regime would be lawful in the light of this clear and unanimous judgement by the Supreme Court. It is unlikely the fees regime will be abolished entirely. A new fee regime may be introduced in time with fees at a lower level and / or a differential charging structure based on the type of claim. This may also be a consideration for the Government in its current review of the operation and cost effectiveness of the tribunal system.
It has been agreed that any fees paid by claimants since 2013 will be refunded by the Lord Chancellor's department, which will place an enormous administrative burden on the employment tribunal system. This will be further complicated in cases where respondents have been ordered to pay the fees because the claimant has won.
It is likely that there will be an initial rise in the number of employment tribunal claims. There is also potential for arguments from people who chose not to bring a claim because of they could not afford the fees.