UK: Tribunal Claims Rise by Thirty Per Cent

Last Updated: 10 August 2006
Article by Christopher Booth

The statutory dismissal and grievance procedures introduced in October 2004 were designed to facilitate workplace resolution of disputes and avoid costly and time consuming tribunal procedures. However, they have been subject to continuing criticism from both sides of industry, with many commentators questioning whether they have been effective in reducing litigation. As a result, statistics showing the level of claims in the past year have been keenly awaited and these have now been published by the Employment Tribunal Service in its Annual Report for the year 2005-2006.

The ETS Report

This report gives two particularly interesting sets of figures. The first shows that in the year to 31 March 2006, tribunals accepted over 115,000 claims against employers, a rise of over 30% on the previous year. At first sight, this suggests that the statutory procedures have completely failed to reduce the number of claims. However, on closer inspection it appears that this rise is due to a number of ‘multiple’ equal pay claims, involving large numbers of similar claims against certain NHS and local authority employers. By contrast, single claims fell slightly, which the ETS suggests may be due to greater workplace resolution of disputes. However, whether such settlements are due to the effective operation of the statutory procedures or to the fact that some employers have lost faith in the system - and so decide to settle even if they feel they have a strong case - is far from clear.

The second figure to note is that over 12,000 claims submitted to tribunals were rejected at a very early stage under the new pre-acceptance procedures (introduced at the same time as the statutory procedures). These require a claim to be rejected if, for example, the claimant has not given the correct information or has not used the prescribed form. It is interesting to note that of these rejected claims less than 5,000 were resubmitted, suggesting that the early rejection of a claim can act as a significant deterrent to potential litigants.

Practical Implications

The DTI is due to review the operation of the statutory procedures and the tribunal rules of procedure later this year and the ETS report will no doubt inform that debate. However, even if the procedures start to have a positive impact on dispute resolution there are other factors within the system which are likely to increase the number of claims. The first is the introduction of the age discrimination regulations in October 2006 which will create significant new employment rights. The second is the pressure on resources at ACAS, which has recently shed one sixth of its workforce. According to its latest Annual Report this will put its ability to fulfil its statutory conciliation duty under ‘severe strain’ and so we may see a decrease in settlements conciliated by ACAS with the result that more cases go to tribunals.

Stress at Work Claims

Stress at work claims can be extremely expensive for employers. Where psychiatric injury has occurred, such cases usually hinge on whether such injury was reasonably foreseeable by the employer. In recent years the courts have taken a fairly robust approach to this issue, particularly since the Court of Appeal in Sutherland v Hatton laid down guidelines for employers dealing with work related stress.

The Hatton guidelines

The Hatton case emphasised that warning signs from employees are particularly important when considering whether injury was reasonably foreseeable and that employers, unless put on notice to the contrary, are entitled to assume an employee can withstand the ‘normal pressures’ of the job. The case also suggested that where counselling services were offered to employees there was unlikely to be a breach of the employer's duty of care. These guidelines were subsequently approved by the House of Lords although they clearly do not have statutory force and should not be applied mechanically.

Counselling Services

The provision of counselling services was recently considered in Daw v Intel Corporation Ltd. In that case the employee, who had suffered a breakdown, argued that the employer ought reasonably to have foreseen that her workload created a risk of personal injury. Hers was a relatively strong case as the employer had been given a written account of her problems before the breakdown occurred and the employer had the resources to deal with the issues raised. Upholding her claim, the High Court held that the fact the employer provided a counselling service (which the employee had not used at the relevant time) did not absolve them from liability, particularly as the service was only equipped to deal with fairly minor problems.

Practical Implications

Many large employers offer support and counselling services to employees. However, this case is a reminder that such a service is not a substitute for vigilance by the employer who should always be alert to signs of stress, particularly where the employee is actively complaining of an excessive workload.

Do You Need To Know ...?

Challenge to Age Discrimination Rules

Heyday, an organisation backed by Age Concern, is mounting a legal challenge to the new age discrimination regulations, which are to due to come into force on 1 October 2006.

The regulations will allow employers to have a mandatory retirement age (subject to certain limitations) but give individual employees the right to request to work beyond that age. However, there is no right to have such a request granted and Heyday is arguing that unless mandatory retirement ages are abolished older people in the UK will be forced out of the workplace and that this is illegal under European law.

If permission is granted for the case to go ahead, a High Court hearing is likely to take place this autumn.

Transferring Data outside the EEA

Under data protection rules, personal data must not be transferred outside the European Economic Area unless there is an ‘adequate level of protection’. This principle is becoming increasingly important as more companies send personal information abroad - for example through the outsourcing of call centres.

Recently the Information Commissioner's Office has warned that UK based employers retain responsibility for personal data processed abroad and has updated its guidance material on this topic. This now includes a comprehensive (and lengthy) legal analysis together with a shorter and more user friendly summary of relevant issues. Both are available on the ICO's website at

New TUPE and the Rescue Culture

To help promote a ‘rescue culture’, the 2006 TUPE Regulations provide that employee liabilities will not automatically transfer across to the transferee if the transferor is subject to certain types of insolvency proceedings. The DTI has now issued useful guidance giving its view on the application of these complex provisions to specific types of insolvency proceedings such as compulsory liquidation, administration and administrative receivership. For further information see

Cases referred to in this update:

Sutherland v Hatton, CA [2002] IRLR 263; Daw v Intel Corporation Ltd, HC [2006] EWHC 1097.

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