Employment tribunal claims rebound with 16% increase in just six months
Hugh James Solicitors says that the number of employment tribunal cases fell from 10,900 in Q2 2013/14, after the introduction of tribunal fees. However, the number of claims is now re-bounding as disgruntled former employees adjust to the new fees and weigh the financial risks to them of pursuing a claim against the potential pay-out.
Hugh James Solicitors notes that when multiple claims are included in the analysis, the increase in the number of tribunal cases is even more striking – rising by 75% from 10,840 to 18,940 in a year**.
Emma Burns, partner, head of employment and HR services group at Hugh James Solicitors, explains, “The cost for launching a claim is between £160 to £250 when they were first introduced it was a shock, but now people are more acclimatised to these fees.”
Hugh James adds that changes to the procedure for lodging a tribunal case may also be influencing the sudden acceleration in the number of cases.
From 6th May 2014, it became mandatory for former employees to use the advisory, conciliation and arbitration service (Acas)’s early conciliation service before lodging a tribunal case. The early conciliation service is intended to offer mediation between employers and employees in order to avoid a tribunal hearing.
Hugh James Solicitors notes that since the introduction of Acas’ early conciliation service, the total number of employment tribunal cases, when both single and multiple claims are taken into account, has more than doubled from 8,540 cases in Q1 2014/15.
However, Hugh James Solicitors notes that the new Acas service may be helping to clear up certain types of cases that tend to be easier to resolve – for example, the number of redundancy payment cases has fallen by 31% since the Early Conciliation service was launched.
Emma Burns adds, “With straightforward cases, such as a dispute over whether or not redundancy payments were made, the Acas service seems to be successful in clearing issues up more quickly, so changes to the system are helping.”
“However, the sharp increase in the overall number of cases may be down to claimants going to Acas because they have to, not because they have any real intention to try to reach a sensible agreement with their former employer. A lot of cases are simply being held up rather than resolved, and we are now seeing them hit the tribunal system.”
“Despite the recent reforms it’s still a big risk for employers to fight certain types of claims, such as discrimination claims. The major costs in any tribunal case are not the administrative fees but the legal costs. It is exceptionally rare for an unsuccessful claimant to have to pay their employer’s legal fees for a complex case like a discrimination claim.”
“That means that even if the case has no real merit, the system is still stacked in the claimant’s favour it will often be cheaper for an employer to pay out to settle a case rather than fight a long-drawn out tribunal. The recent changes are a start, but there needs to be a more fundamental overhaul of how the tribunal system works.”
* October 1st to December 31st 2014.
** Q3 2013/14 compared to Q3 2014/15.