Written by Brabners LLP
This month, an Order has been put before Parliament which will increase the potential employment tribunal awards that can be made. This comes at a time when recently published statistics have shown an increase in certain claims being made to employment tribunals following the abolition of tribunal fees. We have set out further details below about the new limits, which apply from 6 April 2018.
Increased Tribunal Awards
The Employment Rights (Increase of Limits) Order 2018 will, when in force, amend the compensation limits for certain tribunal awards. In particular:
- The maximum compensation award for unfair dismissal will increase from £80,541 to £83,682. The increased maximum will apply to claims where the date of termination falls on or after the date that the Order comes into force.
- The minimum compensation award for certain types of unfair dismissal cases, such as dismissals because of trade membership activities and health and safety duties, will rise from £5,970 to £6,203. Again, this will apply to such claims where the date of termination falls on or after the date that the Order comes into force.
- The maximum limit on a week’s pay will also increase from £489 to £508. This limit is relevant, for example, when calculating redundancy payments.
The Order will come into force on 6 April 2018. Any compensation awards which are made prior to 6 April 2018 will remain at the current levels.
Employment Tribunal Claims
As expected, there has been an increase in the number of tribunal claims since fees were abolished in July 2017. The statistics for July-September 2017 show that, when compared to the same period in 2016, the number of claims lodged by a single applicant increased by 64%. However, the number of claims that were lodged by multiple applicants decreased by 15%. The most recent statistics, for the period from October 2017-December 2017, show a similar pattern of increased employment claims. The statistics include:-
- the number of single applicant claims being lodged has risen by 90% when compared to the same period in 2016;
- since tribunal fees were abolished in July 2017, the tribunals have seen approximately 3,000 new cases being issued per month. Interestingly, this is still lower than the number of cases being issued prior to the fees being introduced which were around 5,000 a month;
- 7,775 claims were disposed of during that period, which is a reduction of 30% when compared to the same period in 2016. Of the disposed cases, 31% were settled through ACAS, 21% were withdrawn and 8% were successful at a hearing.
Whilst there is normally an increase in the minimum and maximum tribunal awards each year, this is particularly unwelcome at a time when the number of individual claims being brought has increased. Employers should continue to be mindful of the risks of litigation and ensure steps are taking to avoid employment litigation wherever possible.
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