The General Secretary of UNISON described the Supreme Court’s decision to uphold his trade union’s challenge to employment tribunal fees as “the most significant judicial intervention in the history of British employment law” (R (on the application of UNISON) v Lord Chancellor [2017] UKSC 51) (see box “UNISON’s litigation”). Certainly it was a ground-breaking decision; the Supreme Court unanimously ruled that the government acted unlawfully when it introduced the fees in 2013.

Before the introduction of the fees regime, access to employment tribunals was free of charge. Since 2013, there has been a dramatic decline of almost 70% in the number of tribunal claims submitted each year, and a particularly marked decline in lower-value discrimination claims.

The court’s decision means that, as of the date of its judgment on 26 July 2017, employment tribunal and Employment Appeal Tribunal (EAT) fees cease to be payable. Just as claims reduced when the fees came in, so employers should expect an initial rise in the number of employment tribunal claims now that the fees have gone. Employers should be aware that there is a greater risk of claims if they do not follow the law. In the new landscape, employers will also have to think carefully about how actively they engage with Acas early conciliation. The strategy of assessing how committed claimants are by waiting to see whether they will pay the money to bring a claim will no longer apply.

In the initial increase in claims, there is likely to be a number of claims that are technically out of time. These claimants may argue that they should be allowed to pursue their claims out of time because they could not afford the fee. It is too early to say how tribunals will approach these arguments, other than to say that they will have more latitude to extend time in discrimination cases than in unfair dismissal claims, where the test is more difficult to satisfy.

The government has undertaken to reimburse fees paid since 2013, the estimates for which range from £27 million to £31 million. This will primarily affect claimants, although employers that have paid fees in EAT appeals, judicial mediations and counterclaims for breach of contract will also be entitled to reimbursement. In addition, employers that have been ordered to pay costs to reimburse fees paid by a successful claimant may also be entitled to a refund.

Guidance is awaited from the MoJ on the mechanics of how this large-scale reimbursement will work. In the meantime, where employers believe that they may be entitled to a refund they should write to the tribunal to register their interest, asking the tribunal to confirm how the payment will be repaid and when.

One of the unanswered questions is whether the government will revisit fees following a more thorough consultation and with a more sophisticated approach to what fees are payable by whom. After the judgment in UNISON, the government confirmed that it would take immediate steps to stop charging fees in employment tribunals. However, it also observed that the court accepted that court and tribunal fees may be justifiable in principle, therefore leaving open the possibility that a new fee regime may be introduced in time with fees at a lower level, or a differential charging structure based on the value of claim or other metrics, or both.

In the authors’ view, it is unlikely that a new fee regime will be introduced in the short term. The government will clearly be mindful of the threat of further judicial review proceedings if it gets it wrong again. Given the government’s current lack of Parliamentary majority together with other priorities (including, of course, Brexit), it seems unlikely that it has the time and resources to make sure it gets it right second time around when the fees collected certainly were not making these tribunals self-funding, as the government intended.

It remains to be seen what the full practical effect of UNISON will be. While an increase in the number of tribunal claims is likely, returning to pre-2013 levels does not necessarily follow. The increase in the length of service requirement from one to two years, together with the cap on unfair dismissal claims at one year’s pay, and the introduction of Acas early conciliation, also contributed to the reduction in claims since 2013.

In the new fee-free world, much will depend on whether:

Employers that adopt fair employment practices, and have robust policies and procedures in place, have less to be concerned about. The employment tribunal rules provide mechanisms to weed out claims with no reasonable prospect of success and tribunals have powers to order costs against claimants who act vexatiously or unreasonably. Both of these will remain.

In UNISON, the court emphasised the fundamental importance of the rule of law and pointed out that the constitutional right of access to the courts is inherent in the rule of law. Therefore, the implications of this judgment go beyond the realms of employment law into civil claims, including fees for County Court and High Court employment claims.

While fees in the civil courts are graded according to the value of the claim, they are not much more sophisticated than the tribunal fee regime. This begs the question of whether there may be similar challenges to the wider fee regime. There has been no challenge as yet, but it is undoubtedly an area for businesses and their representatives to monitor.