Neil Downey provides an insight into the recently published Employment Statistics.
On 13th March 2014 the Ministry of Justice published quarterly statistics relating to tribunal claims in the period October 2013 to December 2013¹. They held particular interest for employment practitioners, as they would provide the first clear indication of the effect of the introduction of employment tribunal fees at the 29th July 2013.
The headline figures for ET claims were these:
- The number of claims received was 9,801
- There were 79% fewer claims than in the corresponding period in 2012
- There were 75% fewer claims than in the previous quarter July to September 2013
Most jurisdictions saw a drop of over 50% from the period October to December 2012, with several between 60% and 85% down. None saw an increase.
In addition, the tribunals' powers to "weed out" hopeless cases, contained in rules 26 to 28 of the 2013 Rules of Procedure, were used in fewer than 1% of cases.
A simple cause and effect relationship between the introduction of fees and the reduction in the number of claims cannot necessarily be assumed: declining unemployment and the increase in the period of continuous service needed to bring an unfair dismissal claim might also be factors. However, the correlation appears to be stark. A reduction was expected, but not necessarily to this extent.
ACAS's early conciliation service will become operational on 6th April 2014, and it will be mandatory in respect of claims presented from 6th May 2014. Therefore a further reduction in the number of claims might be anticipated.
What the statistics do not tell us is the merits of the claims which are not made, and which might have been made before 29th July 2013. Some of the most determined litigants, who were not previously deterred by costs warnings, have weak and time-consuming claims. Conversely, it is not difficult to imagine that an employee with a relatively strong unfair dismissal claim which is not worth very much money might reasonably conclude that it is not worth staking £250 now and a possible further £950 in a few months' time (assuming that he or she has that money to hand), in order to have a chance of recovering a couple of thousand pounds later on.
While it is too early to say whether these figures are the start of a longer term trend, we can speculate as to what the consequences might be if they are.
One possibility is that the challenge to the lawfulness of the fees regime will be strengthened. A substantial and greater than expected drop in the number of claims, sustained over a long period of time, might be used in support of the argument that the regime is making it virtually impossible or excessively difficult to enforce EU-derived employment rights, thus breaching the principle of effectiveness.
Another is that trade union membership will be boosted. Unions will pay fees incurred by their members in pursing claims, subject to a merits test. The most recent statistics, relating to 2012, showed a modest year-on-year increase in the number of employees who were trade union members, the first such increase in several years.
This publication is intended to provide general guidance only. It is not intended to constitute a definitive or complete statement of the law on any subject and may not include more recent changes since the date of the publication. It is no substitue for legal or professional advice in any case. Any views or opinions expressed in this article are those of the author only.