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Employment Tribunal Statistics Do Not Show a Need for Less Employment Law Protection

Employment Solicitor Vanessa Wilson reviews the latest Employment Tribunal statistics for the year to 31st March 2012, which have just been published. 

The headlines are that 186,300 claims were lodged, and that this is a 15% fall compared to the previous year.

The average award figures can be distorted by a single huge award (one Race Discrimination claim was awarded £4.4 million compensation last year) so the median awards are generally a better indication of outcomes. This year the median awards for Unfair Dismissal, and for Discrimination due to Race, Sex, Religion and Age, all fell between £4,500 and £6,700. Disability Discrimination came in a little higher at £8,900 and Sexual Orientation Discrimination topped the list at £13,500.

The number of costs awards made went up sharply from 487 to 1,411 but was skewed by 800 claimants in one case each being ordered to pay costs. If those 800 awards are treated as one case the rise is much smaller, to about 600 cases. However, two points stand out. Firstly, 600 cases is a small proportion of the cases resolved. Secondly, 92% (or 81% if you treat the 800 as one case) of costs awards were made against claimants.

These figures represent the period before the Government’s Employment Law reforms take effect. Some of those reforms only came in April 2012 (increasing the amount a tribunal can award as costs), some won’t bite until April 2013 (the extension of the Unfair Dismissal qualifying period from one year to two for people first employed in April 2012), and some have not yet been given an implementation date (most notably fees and compulsory pre-claim arbitration.)

But as the numbers of cases were falling anyway, despite the economic conditions, what is the need for the reforms? One might be forgiven for thinking that this is opportunism rather than evidence-based policy-making. Many have suggested that there is precious little evidence beyond the anecdotal that labour market deregulation will promote growth by freeing employers from fear of claims.

The costs awards figures might also reassure employers that they are very unlikely to be required to pay any of the claimant’s costs.

Another trend is the decline in union or legal representation for claimants. In 2010-2011 about 152,000 claimants had such representation. In 2011-2012 this virtually halved to 78,000. Many employers will see that as a good thing too.

So, if claims are steadily declining, costs awards are rising and are overwhelmingly against claimants, union or legal representation of claimants is plummeting, and median awards remain modest, what’s the problem? Answers on a postcard to Vince Cable c/o BIS......

Vanessa Wilson is an Employment Lawyer at Slater and Gordon in London.

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