A Word from the Editor - July 2018

Author:
Alex Lock, DAC Beachcroft LLP
Date:
Sunday, July 1, 2018
Topics:

Having been inspired by the introduction of the General Data Protection Regulations to be careful with processing of data, I decided to try and delete unnecessary emails and articles submitted by authors. After all, what legitimate purpose could be served by hanging on to the musings of Barry Clarke, Joanne Owers and Gareth Brahams (to name but a few) in draft form? Let alone their photos. What struck me in going through those hundreds of emails is how often suggestions were made for articles on mediation.

Prior to the introduction of employment tribunal fees in July 2013, the number of claims had reached over 200,000 a year. This was seen as a real cause for concern in some quarters. The time and financial costs to business in dealing with this number was seen as excessive.

On a micro level this was probably true. The oft-cited small company would find the costs difficult to manage and the time commitment a huge distraction from the day-to-day running of the business. On a macro level, however, my view was that this lacked some credibility. While 200,000 tribunal claims sounds like a lot, in the context of there being – then – some 29,000,000 working relationships, it sounds a lot smaller. Each of those relationships has the potential to go wrong in some respect, from either party’s perspective, perhaps in relation to pay, promotion, conduct or management. If only 0.6% of them ended up as a tribunal claim (let alone in a hearing). it may be regarded as statistically insignificant.

Nevertheless, in recognition of the effect on both the individual and the organisation, many people proposed that mediation should be encouraged to settle differences. Various studies were undertaken and these showed that better results seemed to be achieved, at least in terms of the sense of grievance being resolved and a more amicable conclusion to a relationship being reached.

According to the latest figures published in June, the number of tribunal claims has more than doubled from January to March 2018, compared to the same period last year, up 118%. (As an aside, the number of people in work has continued to increase and now is more than 32,000,000, according to the latest Labour Market Survey. This means that the percentage of work relationships that ‘go bad’ is now around 0.3%.) Although we don’t have figures for a full year from the abolition of fees in July last year, what we do have suggests that claims will be running at an annual rate of around 100,000. That is a long way from the peak in 2012/13.

Other changes were introduced at the time of fees. The qualifying period of employment for bringing a claim of unfair dismissal was doubled to two years. The restriction on compensation for unfair dismissal was tightened further. While these will have had some effect, my sense is that it was fairly limited. I think that one of the main reasons we have not seen an immediate bounce back to 150,000- 200,000 claims each year is that we now have early conciliation.

It is not a perfect system and there are often criticisms about there being a lack of information, engagement or resources. It does, however, give an opportunity for differences to be aired in an atmosphere of trying to sort things out – and there is no doubt it does yield results. The latest Acas figures I could find show that for early conciliation around 17% of notifications result in a settlement and a further 58% do not progress to a tribunal claim. This data suggests that we may be some way off from a return to the pre-fees levels of claims. And that there will be fewer suggestions of articles on mediation.

Alex Lock, DAC Beachcroft LLP

The legal content in this article is believed to be correct and true on this date.