The Government will stop charging employment tribunal fees and refund those who have paid, after the Supreme Court ruled against the policy.
The Ministry of Justice said it accepted the Supreme Court ruling, which found the Government was acting unlawfully and unconstitutionally when it introduced the fees four years ago.
The decision marked a victory for public sector union Unison, which had waged a four-year legal battle to overturn the policy.
The fees were introduced in July 2013 by Chris Grayling, then the Lord Chancellor in a bid to reduce costs and free up clogged up courts.
Unison argued that the fees of up to £1,200 prevented workers from seeking justice and were discriminatory toward women and other groups of workers.
Justice Minister Dominic Raab said: “In setting employment tribunal fees, the Government has to consider access to justice, the costs of litigation, and how we fund the tribunals.
“The Supreme Court recognised the important role fees can play, but ruled that we have not struck the right balance in this case.
“We will take immediate steps to stop charging fees in employment tribunals and put in place arrangements to refund those who have paid.
“We will also further consider the detail of the judgment.”
According to Unison, the ruling means the Government will have to refund more than £27m to the thousands of people charged for taking unfair dismissal claims to tribunal.
Unions hailed the decision as a victory for workers’ rights.
Image: Unison has fought against the fees since they were introduced in 2013
“It’s a major victory for employees everywhere,” said Unison General secretary Dave Prentis.
“Unison took the case on behalf of anyone who’s ever been wronged at work, or who might be in future. Unscrupulous employers no longer have the upper hand.”
TUC general secretary Frances O’Grady said “tribunal fees have been a bonanza for bad bosses, giving them free rein to mistreat staff.”
“Too many low-paid workers couldn’t afford to uphold their rights at work, even when they’ve faced harassment or have been sacked unfairly.”
Gillian Guy, chief executive of Citizens Advice, said “this landmark ruling should mark an end to Employment Tribunal fees standing in the way of people upholding their employment rights.”
David Isaac, chairman of the Equality and Human Rights Commission, which provided independent legal opinion during the case, called for the current policy to be scrapped.
He called the Supreme Court ruling a “damning verdict on the current regime”.
“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,” he said.
“Women face a double penalty with high fees and short time scales to bring maternity discrimination cases.”
A review of the impact of the fees conducted this year showed there had been a 70% drop in the number of cases since they were first introduced.