It is 25 years since industrial tribunals became employment tribunals, under the Employment Rights (Dispute Resolution) Act enacted on 1 August 1998. Tim Jones, of law firm Higgs LLP, reviews the current state of play with a system under strain from a deluge of cases.
Formed a quarter of a century ago, the employment tribunal system in England and Wales was designed to provide a platform for employees and employers to resolve disputes in a fair and just manner.
While that core principle remains the same, it has undergone significant changes over the past 25 years. As with any legal system, it has had to adapt and evolve in response to societal changes, economic pressures and legislative reforms.
There is no doubt that the employment tribunal system has come a long way since its inception. While it has faced challenges and criticisms, it remains a vital mechanism for upholding workers’ rights and ensuring fair treatment in the workplace.
Today, however, the system is under significant strain with a huge backlog affecting both claimants and employers. Urgent action is required to address this to ensure it continues to offer an effective service in the coming years.
In 2022, there were a staggering 482,789 outstanding employment tribunals in England and Wales. This number is actually slightly lower than the previous year, which recorded 506,896 outstanding cases. This data highlights the immense pressure the tribunal system has been under, especially in recent years.
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The sheer number of outstanding cases has tangible implications for all parties involved. For claimants, delays in hearings mean prolonged periods of uncertainty. For many, especially those with wage-related disputes, this can result in financial hardship.
For employers, meanwhile, beyond the direct financial implications of legal fees and potential settlements, there’s the added strain of reputational damage. Prolonged cases can also mean operational disruptions, especially for smaller businesses.
There are four main reasons for these high levels of claims:
1. Tribunal fees impact: the introduction of tribunal fees in 2013 led to a significant drop in the number of claims. However, their subsequent abolition in 2017 saw a resurgence in the number of cases. The recent statistics, with nearly half a million outstanding cases, underline the long-term impact of these policy changes.
2. Covid-19 pandemic: the recent global pandemic has undeniably affected all sectors, including the legal system. The temporary closure of many tribunals during lockdowns, and the subsequent backlog of cases, have contributed to the high number of outstanding tribunals.
3. Nature of claims: while specific breakdowns for 2022 are not yet published, historical data and trends suggest that unfair dismissal and discrimination claims continue to dominate the tribunal system. The rise in societal awareness around issues such as workplace discrimination, coupled with legislative changes, has likely contributed to this trend.
4. Economic factors: economic downturns, company closures and redundancies, especially in the wake of the pandemic, might have led to an increase in employment-related disputes. Economic pressures often result in wage disputes, redundancy issues, and unfair dismissal claims, further burdening the tribunal system. The nature of claims brought before the tribunal has also evolved over the years.
Mediation and conciliation are often quicker and less adversarial than traditional tribunal hearings”
Currently, the most common types of claims relate to:
- Unfair dismissal: this remains one of the most frequently lodged claims. It arises when an employee believes they have been dismissed without a fair reason or without a proper procedure being followed.
- Discrimination: claims related to discrimination based on race, gender, age, disability, religion, or sexual orientation have seen a steady increase, reflecting a growing societal awareness of these issues.
- Wage disputes: these claims often revolve around issues like unpaid wages, holiday pay, or equal pay disputes.
- Whistleblowing: employees who believe they have faced detriment or dismissal for raising concerns about wrongdoing in the workplace can bring these claims.
How tribunals have changed
Over the past 25 years, the employment tribunal system has seen a series of reforms aimed at making it more efficient and accessible. As mentioned earlier, one of the most significant changes came in 2013 with the introduction of tribunal fees. This move was controversial, as many believed it would deter genuine claimants from pursuing their cases. Indeed, following the introduction of these fees, there was a sharp decline in the number of claims being made. However, in 2017, the Supreme Court ruled that these fees were unlawful, leading to their immediate abolition and a subsequent increase in claims.
Another notable change has been the shift towards alternative dispute resolution (ADR) mechanisms, such as mediation and conciliation. These methods are often quicker and less adversarial than traditional tribunal hearings, making them an attractive option for both employers and employees.
As an experienced workplace mediator, I know firsthand that many conflicts can be effectively resolved through mediation rather than resorting to expensive legal action. Encouragingly, recent statistics showed that over 75% of employers have used or are thinking of using mediation in the workplace. It has a high success rate, with 90% of disputes not reported and 70-80% of conflicts being settled through mediation. Mediation should always be the first port of call for any business facing tribunal action.
In conclusion, the employment tribunal system remains an essential service – but the recent backlogs are a cause for concern and there is a clear need for further reforms to ensure the system remains efficient and accessible. As society continues to evolve, so too must our legal systems, ensuring they reflect our changing values and priorities. Ultimately in order to move forward, the system will need further investment far in excess of what we have seen so far. The sooner that investment comes, the better.
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