The Supreme Court has ruled that the employment tribunal fee system introduced four years ago is unlawful and must cease with immediate effect. All fees already paid are now likely to be reimbursed by the government.
The ruling decided that the current fee regime was unlawful under both domestic and EU law. It also found that the higher fee for Type B claims was not justified and constituted indirect sex discrimination against women.
The tribunal fee regime was accordingly unlawful on multiple grounds and it will not be easy for the government to immediately replace it.
If the government wishes to continue to charge fees for tribunal cases, there will need to be substantial changes as to how the regime is operated. It is possible that the government will consider a greater sliding scale of charges or even charging the employer when claims are issued. The government will have to show it has taken into account access to justice and the fees are proportionate to the aims of incentivising settlement and discouraging weak or vexatious claims.
We will have to wait and see how the government responds to this decision and whether introducing a new fee regime is a priority (when its main concern is dealing with the issues surrounding Brexit). The last thing the government will want to do is to introduce a new scheme that is equally open to challenge.
There is speculation that employees may now seek to issue claims that are out of time, on the basis that they were previously dissuaded by the unlawful fee regime. It is currently unclear as to how any such applications will be treated.
It is likely that we will see some increase in tribunal litigation over the coming months. It is accordingly ever more important that employers can justify their decisions and ensure that they are legally compliant in their actions.