The Supreme Court has ruled that fees for bringing employment tribunal cases are unlawful.
Under laws brought in by Chris Grayling in 2013, the then justice secretary, people in England and Wales had to pay as much as £1,200 to pursue claims against their employer.
But the court ruled today this was unlawful under both domestic and EU law because it “had the effect of preventing access to justice”.
Ministers argued the fees were needed to reduce malicious claims against employers.
But the Unison trade union took the government to court arguing having to pay fees was discriminatory.
The court unanimously agreed with Unison’s appeal.
The government will now have to refund £27m to thousands of people charged for taking claims to tribunals since July 2013.
The government said it will take immediate steps to stop charging employment tribunal fees following the ruling, the Ministry of Justice said.
Labour’s shadow justice secretary Richard Burgon said: “The Conservative Government should do the right thing, accept the ruling and consign their immoral Employment Tribunal Fees to the dustbin of history, rather than spending more taxpayers’ money trying to defend the indefensible.
“It’s an important day for access to justice for ordinary working people everywhere. The Conservative Government – which in coalition with the Lib Dems brought in this immoral restricted access to justice – must now pay a £32 million price for attacking workers.
“Labour’s manifesto pledged to abolish Employment Tribunal Fees. Labour’s position has been vindicated by the highest court of the land and Unison should be congratulated on winning a victory for working people everywhere.”
UNISON general secretary Dave Prentis said: “The government is not above the law. But when ministers introduced fees they were disregarding laws many centuries old, and showing little concern for employees seeking justice following illegal treatment at work.
“These unfair fees have let law-breaking bosses off the hook these past four years, and left badly treated staff with no choice but to put up or shut up.”
Jason Moyer-Lee, the general secretary of the Independent Workers’ Union of Great Britain (IWGB) which represents workers in the so-called gig economy, welcomed the “momentous decision”.
We have forked out a fortune on employment tribunal fees for our low-paid members who otherwise would not have been able to argue their cases,” he said.
“Given the near total absence of government enforcement of employment law and the government’s refusal to get serious about addressing insecure work, today’s decision is a game changer. This is what justice looks like.”