In the three months since the Supreme Court abolished employment tribunal fees in July 2017 the overall number of claims brought before the tribunal rose 66% compared to the three months prior.
With the opposite effect seen in the year after the introduction of fees in July 2013, when claims volumes dropped by 70% year-on-year, the latest figures have led some to suggest that the numbers will now return to pre-fee levels.
It’s no surprise that removing the financial barrier to bringing a claim has led to an increase in the volume of cases brought before the tribunal. Anecdotal evidence certainly suggests that a number of the claims brought from July to September 2017 are from claimants who were previously put off by the fee structure. Specifically, there’s been a spike in relatively low-value claims, such as for unlawful deduction of wages – with the number of claims submitted between July and September 2017 up almost 50% year-on-year. This indicates that cases that wouldn’t necessarily have been worth pursuing under the previous fee structure are now back on the table for would-be claimants.
These statistics will be a sobering read for employers and HR professionals. However, the Supreme Court judgment shouldn’t be considered in isolation, or seen as inevitably opening the floodgates to fresh claims. There have been many other changes to the employment law landscape in the four years since fees were introduced, so their abolition doesn’t mean a return to the pre-2013 status quo. While the ruling is clearly very significant, HR departments should also remember the implications of wider shifts in the employment law landscape on the likelihood of claims.
One factor that is likely to have contributed significantly to an overall rise in claims is the outcome of Farmah & others v Birmingham City Council in June 2017. Rules governing claims brought before the tribunal state that two or more claimants can make their claims on the same form if their claims are ‘based on the same set of facts’. The ruling in Farmah & others v Birmingham City Council clarified that this criteria means a common factual basis rather than a common course of action. As a result there has been an increase in the number of single cases coming before the tribunal, which might otherwise have been combined. This outcome can be seen in the latest tribunal figure too – a 15% drop in multiple claims despite the overall rise.
It’s also important for the rise in claims to be considered in the context of the improvements in employment rights that have been made in the last four years. For example, employees now have an entitlement to shared parental leave. Naturally with greater rights for employees comes greater potential for employers to transgress – and therefore more potential routes to claims.
All of this serves as a reminder for employers of the importance of observing best practice when it comes to employee rights. While robust HR procedures are essential for employers at all times, these fresh figures are a timely prompt to review and, if necessary, strengthen an organisation’s processes to resolve disputes before the tribunal stage is reached.
Paul McFarlane is a partner and employment law specialist at Weightmans