As the Employment Tribunal system struggles, employment lawyers propose solutions

You may have seen the headlines suggesting that the Employment Tribunal system is on the brink of collapse as the Government's overhaul of worker rights starts to come into effect. Is it true, what does it mean, and what is the solution? We'll try to answer those questions here.

In the last two years alone, the number of claims (especially complex claims) submitted to Employment Tribunals has risen significantly. This upward trend is likely to continue when unfair dismissal laws change on 1 January 2027, and with increasing use of AI to generate complaints. Meanwhile, the amount of judicial time (and funding) dedicated to resolving these claims has remained relatively static. 

As a result, in just the last two years, outstanding cases in the Tribunal have risen from 37,000 to 58,000. Whilst the simplest claims are being listed for hearing within 6-12 months, those that are more complex (including discrimination and whistleblowing claims) are generally taking a minimum of 12 months to come to hearing. But in some locations, especially London, the delay might be as long as 3 years. This means a long wait for closure (and remedy) and, in some cases, real problems with defending claims as staff move on and memories fade. The (often significant) cost for all involved is both financial and emotional.

This worrying backlog caused the President of the Employment Tribunals to comment earlier this year, in response to aired user frustration, that it is 'incumbent on all stakeholders to look for innovative responses to these challenges'.

The Employment Lawyers Association (ELA), the representative body of employment lawyers across the country, has recently partnered with academics at Cambridge University to undertake detailed research and advance ideas in the hope of prompting reform. The outcome of that research is a 379-page book titled, Reimagining Employment Disputes and Enforcement.

Its recommendations include:

1. Driving alternative dispute resolution. The book says there is near unanimity that grievance procedures do not work; they entrench disputes and inhibit the freedom to find creative and informal solutions. It recommends amending the ACAS Code and Guidance on Disciplinary and Grievance Procedures to emphasize that formal processes should not be the first port of call, and to better direct employers and employees into informal resolution attempts. A key theme of the recommendations is that alternative dispute resolution mechanisms need to be brought to the fore and tailored to properly reflect the emotional context of employment disputes. A specific 'Employment Resolution Service' should be established to inform, guide and advise employers and employees and encourage mediation. Mediators need to be evaluative, interventionalist and practical, not 'post boxes'. More 'reality testing', less 'box ticking', is required. And, at key touchpoints before and during litigation, parties should be driven towards – or at some points forced into – relevant processes to encourage and support them to resolve their dispute themselves.
2. Helping to ensure claims are focused. The litigation process is complex, and the book suggests that claim forms need to be remodeled (and case management used) to ensure that only focused and well pleaded claims are brought and progress through the system. It promotes evaluating the use of an AI model to convert narratives into timelines and specific legal claims. 
3. Having clear claims 'tracks'. The book suggests that cases should be allocated to one of three tracks based on value and complexity. Notably, 'Track 3' would be for claims where the claimant seeks more than 2 years' earnings or wishes the claim to be allocated to this track. Key consequences of being in Track 3 (which would absorb the most Tribunal resource) would be: (a) payment of a court fee (a percentage of the value of the claim), and (b) a full 'costs-shifting' regime whereby the 'loser' generally bears the winner's costs, similar to that of the civil courts. This would represent a huge shift in the Tribunal system, which to date has started from the perspective that each party should usually bear their own costs. If implemented, it might also act as a counterbalance to the anticipated consequences of the removal of the unfair dismissal cap as claimants might wish to keep their claims below 2 years' earnings so as not to risk having to pay the employer's costs if they lose.
4. Contractual claims. The book recommends that the limit on the contractual jurisdiction in Employment Tribunals should be increased from £25,000 to £100,000 (which had also been recommended by others). This would enable many individuals to, for the first time, pursue their contractual claims in the Tribunal instead of civil courts.

The book contains many imaginative responses for the reform of a system that is widely acknowledged to be struggling with a caseload that shows every sign of continue to grow. There is likely to be widespread support amongst practitioners and much that is likely to benefit both employers and employees. As yet, however, there is no indication of the steps needed to implement specific measures or the likely timetable for doing so.