Hugely significant news for employers and employees this morning as the Supreme Court has ruled that Employment Tribunal (ET) fees are unlawful. 

As has been well-reported, the number of ET claims dropped by over 70% since ET fees were introduced in 2013, such a dramatic fall that employment lawyers did start to wonder if they would ever have another ET1 drop on their desk or see the inside of an employment tribunal again. Research found that the fees - up to £250 to file a claim, and another £950 for a hearing - had an impact on lower-paid employees in particular. They did not have the money to lodge claims, and were deterred from trying to recover smaller sums of holiday pay and unpaid wages. 

The Supreme Court has now ruled that the fee regime is unlawful. It found that the fees prevented access to justice, and that they were indirectly discriminatory against women, who lodge proportionately more of certain types of claims which had higher fees, such as in relation to pregnancy dismissals.

The consequences are significant. First, employers can expect the number of ET claims to increase again. Second, it seems that the Government will have to pay back £32m in ET fees to claimants. Will employers who lost a case and were ordered to reimburse the ET fee to the successful claimant now be able to recover the fees from the Government? Third, will claimants who were dissuaded from bringing a claim in recent months due to the fee regime and whose claims are now timed-barred try to lodge a late claim, arguing that their time limit should be extended in the circumstances. Employment laws do allow for a time extension, subject to different tests depending on the type of claim. 

Fourth, ETs are already under-resourced and under-funded - how will they cope with expected extra caseload? And fifth, the smart money is on the Government trying to introduce a new (fairer?) fee regime to replace the current flat-fee system, perhaps with fees based on the amount of compensation sought by the claimant.