Fees for those bringing employment tribunal claims have been ruled unlawful, and the government will now have to repay up to £32m to claimants.
The government introduced fees of up to £1,200 in 2013, which it said would cut the number of malicious and weak cases.
Government statistics showed 79% fewer cases were brought over three years – trade union Unison said the fees prevented workers accessing justice.
The government said it would take steps to stop charging and refund payments.