Employment tribunals: What is the cost to employers?

The latest figures

The Ministry of Justice publishes statistics on both an annual and a quarterly basis showing the number of claims issued, the type of claims issued and how much compensation was awarded.  It is worth noting that the employment tribunal transitioned to a new database between March and May 2021 resulting in only partial statistics being available for the year 2021/2022. 

Source - For the annual and quarterly statistics please see - Tribunal Statistics Quarterly: July to September 2022 - GOV.UK (www.gov.uk)

Volume

• The Employment Tribunals received 18,000 claims and disposed of 13,000 claims in Q2 2022/2023.  When compared with Q2 2021/2022 the figures show the number of claims received has reduced by 19% and the number of claims disposed of increased by 6%. 

Compensation

The annual award statistics for 2021/22 (beginning of April to the end of March) show the following:

• Unfair dismissal - There were 630 claims that received compensation for unfair dismissal (an increase of 51% compared to 2020/21).  The maximum award was £165,000 and the average award was £13,541 (compared to an average award of £12,080 in 2020/2021). 
• Discrimination – There were 200 discrimination cases where compensation was awarded in 2021/2022.  The maximum amount awarded was £228,117 in a race discrimination case, with disability discrimination coming a close second with a maximum award of £225,893.  The largest average award compared to other protected characteristics was received in sexual orientation claims. 

For the 2021/2022 year the following are the maximum, mean and median awards:

The mean awards can be impacted by one-off high awards made and so it may be more helpful to focus on the median awards.  

Backlog of employment tribunal claims

The latest figures from HM Courts and Tribunals Service show a significant backlog of cases with 50,518 open employment tribunal cases in December 2022.  With unresolved employment tribunal cases lingering workplace morale can suffer.  The time and energy which goes into a case from all involved cannot be underestimated and the damage caused by delay is significant.  There may also be wider implications in the workplace where the parties need the judicial decision to agree how a situation will be resolved in the future.  Leaving parties in a state of limbo for lengthy periods of time can have a much broader impact than just the immediate parties and witnesses. 

The government have invested £2.85 million with a target of enabling 1,700 more cases to come before judges by the end of March 2023.  We will have to wait and see whether this aim was achieved when the next set of employment tribunal statistics are available. 

Comment

With the economic crisis takings its toll on both employers and employees, it is inevitable that employment tribunal claims will follow.  Although employers have been focusing on retention for some time now, the uncertain economic climate is likely to lead to a number of businesses taking cost-cutting measures resulting in redundancies.  We expect employment tribunal claims to follow. 

Through Tribunal+ DWF can help employers manage employment tribunal caseloads effectively and to use vital data to shape decisions.  The information collected – ranging from trends in claims arising, to settlements paid, to statistics around claims won, lost and settled – gives greater oversight of cases and clarity of issues, enabling proactive preventative action.   The level of reporting available is endless and tailored to client requirements.  For more information please visit – Employment Tribunal and Court Representation | DWF (dwfgroup.com).