Access to justice vs. Cost to taxpayer: Labour reopens debate on employment tribunal fees

By Clare Brennan, Partner at Hunters Law

October 19 2025 - The Labour government was recently reported to be considering charging workers a fee to bring claims at the Employment Tribunals. This news was met with a swift backlash from the trade unions, before Mr Lammy flatly ruled out the idea, confirming that access to the Tribunals would remain free for all workers, regardless of their income.

The question of charging people to access justice raises important issues. There are inevitably tensions between ensuring access to justice and managing the cost to taxpayers. Although the latest proposal has been shelved for now, it is worth examining its rationale, and the potential implications for HR professionals and employers.

This is not the first time fees have been considered for employment tribunals. In July 2013, the government introduced a burdensome fee regime which categorised claims into Type A for simpler disputes, such as unlawful deduction of wages, and Type B for more complex cases, such as discrimination claims. Type A claims attracted total fees of £390, while Type B claims cost a steep £1,200, covering both issue and hearing stages.

Although the Help with Fees (HwF) scheme was available to assist those on low incomes, the impact was profound. Within just 12 months, the number of tribunal claims plummeted by around 70%, with quarterly applications falling by about two-thirds. This decline demonstrated beyond doubt that financial barriers can deter legitimate claims - particularly from vulnerable workers.

That fee regime's downfall came in 2017 when the Supreme Court quashed the fees order, in a case brought by the Unison trade union. The court held that the charges were unaffordable for many, effectively preventing access to justice, which is a fundamental right under both common law and the European Convention on Human Rights.

The fee structure was also deemed indirectly discriminatory as Type B claims, which attracted much higher fees, were more likely to be brought by women or individuals with protected characteristics under the Equality Act 2010, such as claimants alleging sex or race discrimination. The judgment emphasised that fees must not render rights illusory - a principle that continues to shape discussions on tribunal funding to this day.

Despite this dramatic history, there is a compelling case for reform to align employment tribunals more closely with other litigation forums, where claimants often do contribute to costs in reasonable and measured ways. Currently, with no fees for bringing claims, the entire burden of running the tribunals falls on taxpayers. The direct running costs of the employment tribunal and employment appeal tribunal stood at approximately £80 million in 2022/2023. This figure does not include the funding for ACAS's early conciliation service, which aims to resolve disputes before they reach tribunal.

This model is increasingly unsustainable, especially as backlogs grow. The system had some 45,000 open single cases by March 2025. What's more, the government's forthcoming employment rights bill is expected to increase claim numbers further still. The Federation of Small Businesses has lobbied for measures to ease the strain, arguing that the tribunals are overwhelmed.

The suggested proposal merely sought to alleviate these funding issues through a modest £55 issue fee applicable to all claim types, payable by the claimant upon filing and covering the entire claim process. This fee level was far more affordable than the 2013 structure, but it could generate a meaningful £1.7 million annually to fund the service.

Crucially, the HwF scheme would remain in place to support those in financial hardship, to help protect low-paid workers, who are often disproportionately impacted by unfair employment practices. This would relieve pressure on taxpayers where claimants could afford to contribute, boost funding for the service, and while not aiming to deter claims, it might incidentally discourage some frivolous claims.

If such fees are ever going to be revisited, the lessons from the Supreme Court's 2017 judgment must be carefully heeded. Affordability for claimants is paramount. Any fee structure should be proportionate, non-discriminatory, and designed to preserve low friction, low cost access to justice. A single, affordable, flat fee avoids the pitfalls of tiered charges which can disproportionately impact discrimination cases. Impact assessments should be undertaken to evaluate the potential effects on protected groups, and exemptions or remissions should be clear and accessible.

For HR professionals, this debate has practical ramifications. Employment tribunals handle a very broad array of issues, ranging from unfair dismissal to wage disputes. The absence of any fees has clearly encouraged more claims, thereby fostering a culture of accountability. However, as rising caseloads strain resources, the resulting delays can harm both employees seeking redress and employers defending claims. It now takes longer that before for both sides gain clarity (claims are often taking over a year to be heard and complex, multiday trials are not being listed in some areas until 2027).

Of course, the wisest approach for HR teams is to avoid claims being issued wherever possible. Teams should prioritise robust internal grievance procedures and apply them fairly and constructively. Early ACAS involvement can help to mitigate risks and avoid protracted disputes. The proposed employment rights bill, promising day-one unfair dismissal rights and extended claim time limits from three to six months, will likely amplify tribunal activity, making proactive compliance essential.

Union reactions to the recent proposal were predictably fierce. The backlash saw the proposal labelled a "disaster" that would "price low-paid workers out of justice". Such concerns have validity, given evidence of how such fees deterred claims in the past. Mr Lammy's decision to rule out fees reaffirms Labour's commitment to workers' rights. However, this decision also leaves the employment tribunals' underlying funding challenges unaddressed and chronic delays which look set to get worse. Perhaps the government should recall the old aphorism that justice delayed is justice denied. It is also not in the interests of workers to be waiting for long periods for cases to progress. and future governments may revisit the issue.

Tribunals must remain accessible and sufficiently funded to effectively administer justice. This demands innovative funding solutions, or perhaps an adequate increase in direct funding from the exchequer. After all, a properly funded employment tribunal service would be of benefit to workers and employers alike.

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