Employment tribunal statistics – the reckoning

14 March 2014

The Employment Tribunal statistics were released today. For some they have been a long time coming. Despite a whole host of caveats introduced into the commentary, the numbers are very stark. In short, the number of claims received by the Employment Tribunals between October and December 2013 was 79% fewer than in the same period of 2012, and 75% fewer than last quarter. People have been saying for a long time that since the introduction of fees into the Tribunal last July, ET claims have “fallen off a cliff”. We now know they are right.

Few will believe this sort of decrease accounts for “frivolous and vexatious” claims that may have been removed from the system by the requirement to pay fees. The fact is, fees have been set at a very high level by comparison with the sort of income and capital that the majority of litigants have at their disposal. It is also important to remember that claims do not generally result in awards worth hundreds of thousands of pounds. The majority of claims, if successful, may result in an award of a few thousand pounds. In any event the worth of many claims is limited by statute, for example, the maximum compensatory award for unfair dismissal is currently £74,200. This in itself is subject to the cap introduced last year of one year’s salary (if lower than £74,200). There are even claims for which no more than two weeks’ salary can be awarded subject to the cap on wages. For most of these claims, Tribunal fees amount to £1,200. Little wonder that the Tribunal statistics are showing such a marked, or as the Government puts it, “sharp” decline.

But is this all good news for employers? This is a difficult but important question. At the recent Employment Lawyers Association (ELA) Annual Lecture, John Cridland,  Director-General of the CBI, described the new system of Tribunal fees as a “dog’s dinner”. That is a widely held view. A correction to the regime must now be on the cards. Maybe this will lead to more focus upon the other (arguably rather better) measures that the Government has introduced to avoid the spectre of increasing claims coming before the Tribunals. One of these measures is Early Conciliation which is due to come into force next month. This is a completely free service in which the services of an ACAS Officer can be engaged to try and conciliate a claim before it is issued. All employees will need to advise ACAS of their intention to issue proceedings before they do so, so as to give this new system a chance.

There has also been an increased emphasis, since introduction of a set of new Tribunal Rules last July, on mediation alternatives. These include mediation in the workplace (either by an internal or external mediator), commercial mediation (usually by mediators experienced in employment matters) and judicial mediation (which is conducted by an Employment Judge in an Employment Tribunal, but in an informal and confidential setting). These are the alternatives which employers should be considering far more seriously than before. Indeed, arguably, if they are not resolving to change the way they handle their employment disputes in the future, they probably have not absorbed the new landscape. The good news is that if from an employer’s perspective Tribunal applications decrease as a result, these alternatives may well be a far better way of resolving the disputes that are inevitably going to arise in the workplace, than simply via the blunt instrument of removing employment cases by charging high and unaffordable fees for issuing proceedings.

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