Employment tribunals: the impact of reform

Employment tribunals were designed to be a fast and, when compared to other courts, informal way of resolving disputes between employer and employee, or trade union and employer. However, over the years the increased use of legal representation was perceived as pushing up costs for all parties and employers complained there was little protection against vexatious cases. As a result, the government introduced changes with the broad aim of placing the costs of the system on users rather than on tax payers.

The compulsory introduction of Early Conciliation (see article 188) in 2014 and the introduction of tribunal fees (see article 201) in 2013 were the two main changes that the government introduced.

In February 2015 the Tribunals Service published its first annual report that covered a full year of fees. The report indicated there had been an 81% drop in the number of cases reaching tribunal. As the Early Conciliation service had not been running for a full year, there was some caution about its impact but it was believed to account for 22% of the drop. One of the reasons it has been so difficult to reach conclusions about correlations between the old and new regimes is that many of the multiple equal pay cases that had been distorting the figures were settled during this period.

When looking at the reduction in the types of cases that reached tribunal, there were particular drops in the fast track cases (Type A, see article 201) and unfair dismissal cases. Discrimination cases do not appear to have experienced the same type of drop. In Scotland, the number of individual cases dropped by 57.5%, with particular reductions in unfair dismissal and disability discrimination cases.

Employment tribunals hear cases relating to wages (see article 48 onward), discrimination (see article 65) and unfair dismissal. One of the ways in which a tribunal is much more flexible than a court hearing is that the parties are encouraged to reach a settlement before the hearing, even on the day itself.