Employers are bracing for a surge in tribunal claims after the government agreed to scrap fees for them and pay back £27 million.
Ministers said that they would take immediate steps to refund payments after the Supreme Court upheld a challenge by Unison that the charges were discriminatory.
The court ruled that the government was acting unlawfully and unconstitutionally when it introduced the fees in 2013 for claims such as unfair dismissal, equal pay and redundancy. The charges of up to £1,200 led to a 70 per cent drop in the number of tribunals in England and Wales and were condemned as impeding access to justice.
Dominic Raab, the justice minister, said: “The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case.”
Unison welcomed the ruling, which it said would mean more than £27 million would be paid back to nearly 250,000 people charged since July 2013, when the fees were introduced by Chris Grayling, the lord chancellor at the time.
Dave Prentis, general secretary of the union, said: “When ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.
“The government has been acting unlawfully, and has been proved wrong — not just on simple economics but on constitutional law and basic fairness too. It’s a major victory for employees everywhere.”
David Isaac, chairman of the Equality and Human Rights Commission, said: “The right to justice must be based on the merit of your case, not your ability to pay. Thousands may have been denied of this right and priced out of getting justice. The judgment of the Supreme Court is a damning verdict on the current regime.
“The law only works if people know that it is a fair and just system and the biggest and strongest will not always win. Women face a double penalty with high fees and short timescales to bring maternity discrimination cases.”
Charlie Mullins, the millionaire founder of Pimlico Plumbers and a Conservative Party donor, described the court ruling as disgraceful. He told World at One on BBC Radio 4 that the benefit of leaving the European Union would be to get rid of “this stupid law”.