But proposed reforms only move rather than fix problem, warns EMW
The employment tribunal system backlog is heading towards breaking point, according to the latest available data, warns EMW, the commercial law firm. EMW says that the tribunal's backlogs could hurt UK businesses.
The number of outstanding Employment Tribunals Service cases almost quadrupled from 144,900 cases in 2007 to 530,400 at the end of 2011, with new cases continuing to outstrip completed ones.
Louise Holder, Employment Principal at EMW says: "The tribunal system is completely over-stretched. Cases are continuing to pile up, leaving both employees and employers in limbo. Longer case lead times mean more resources and time are used up that a business could spend on something else. It can add to financial uncertainty too, as businesses may end up spending prolonged periods of time with the threat of a financial penalty hanging over them."
The Government has announced plans to reform the system, including proposals to require all potential tribunal claims to be submitted for conciliation to Acas (the Advisory, Conciliation and Arbitration Service) first. However, EMW are concerned that this would merely move the problem from one part of the system to another.
Louise Holder comments: "Moving where the caseload falls won't help matters: it just moves the bottleneck from one poorly-equipped part of the system to another. Acas already has a backlog of its own, which a wave of new cases will only add to."
"The Government has also said that it expects to find efficiency savings from the changes, but, going by previous experience of expected government efficiency savings, they should be ready for disappointment: these savings are always difficult to achieve. This isn't the type of change that the tribunals system needs."
"The Government should focus more on its proposals that might speed up the tribunal process, such as looking at alternatives to tribunals, or reviewing tribunal procedures. Thanks to the uncertain financial climate, the employment tribunal system is going through a busy period so being able to deal with the increased caseload is key."
At the end of 2011, 84% of 'single' cases had an initial hearing within 26 weeks of being accepted by the tribunal. However, EMW point out that the speed with which a case starts has little bearing on how long it lasts.
Louise Holder comments: "The Employment Tribunals Service has improved its speed at holding an initial hearing for simpler single cases, but these cases then drag on and on. Half of simpler 'single' cases take longer than five months to clear, while half of all 'multiple' cases - where similar cases are heard together - take longer than two years to conclude. These multiple cases make up the vast bulk of all the cases in front of the employment tribunals. In 25% of 'multiple' cases it takes longer than three years for a decision to be reached."
"Every case that drags on is a business spending more time and money than they need to. Some of the Government's proposals might help, but if the Government really wants to improve employment tribunals then it needs to come up with proposals that do more than re-arrange the deckchairs."
The Government's proposals are part of a wider picture of reform of employment law in the UK, including the recently published Beecroft report, which argued that businesses should have the right to make 'no-fault dismissals'.
Commenting on the Beecroft proposals, Louise Holder adds: "The Beecroft recommendations don't necessarily offer a complete solution to reducing the burden on employment tribunals. For example, no-fault dismissal doesn't always rule out tribunal cases being brought on discrimination lines. Rather than looking at no-fault dismissals as a solution, businesses should focus on their performance management frameworks so they don't have to resort to dismissals, while the Government should focus on making material improvements to functioning of the tribunals system."
© EMW 2012