The annual figures for Tribunal claims have now been published. The figures I always look at first are the absolute number of tribunal and especially unfair dismissal claims (unfair dismissals are the bread and butter of the Tribunal’s work), the relative success of unfair dismissal claims at full merits hearings (including reinstatement rates), and the relative success of race discrimination claims compared to other discrimination claims.
Given the press coverage earlier in the year predicting a big rise in discrimination claims, I also wanted to look at those, plus the figures for costs applications (which, just anecdotally, seem to be becoming a far more common feature of ordinary Tribunal litigation).
Starting with the number of claims and unfair dismissal claims. Both have fallen, for the third year in a row. Note, this is before any of the coalition’s employment reforms have taken effect, with far sharper falls likely in 2012-2013 (as the unfair dismissal changes take effect) and in 2013-2014 (fees).
The total number of claims in the system have fallen as follows: 2009-2010 392,800 2010-2011 382,400, 2011-2012 321,800 – by my reckoning, that’s an 18% fall in two years.
(Note to any Daily Mail journalists reading this and thinking “even at 320,000 that’s a lot of judicial time wasted by vexatious employment disputes”; this figure includes a lot of double and even triple-counting of the same claim where the claim has been submitted in more than one jurisdiction, and in any event most claims settle before the final hearing: there are only 43,000 Tribunal final hearings a year; and claimants’ overall success rates at final hearings of around 62% haven’t changed much in 12 months).
More interestingly the total number of unfair dismissal claims have fallen over the same time as follows: 2009-2010 57,400 2010-2011 47,900, 2011-2012 46,300 – by my reckoning, that’s a 20% fall in two years.
There aren’t any figures for the total number of dismissals in the UK economy, so it’s hard to say whether this fall is a sign of a lesser – or greater – tendency for dismissed workers to bring claims. Certainly, there were a lot of dismissals due to the recession in 2009-2010, and there have still been a lot in 2011-2012.
Looking at wages claims, over the same period, there has been a 33% fall in claims.
Putting this figure beside the drop in unfair dismissal claims (and I think we can say, with certainty, that there has been no trend towards more accurate payment of wages as the recession has continued); my feeling is that workers in general are more nervous about bringing claims, that the figures show a certain willingness by workers in employment to tolerate underpayment of wages (or at least not to sue about it) because workers’ primary fear is losing their job and long-term unemployment, and while this drift away from litigation is clearest in wages claims, it is less evident in unfair dismissals, where workers have already been sacked, and, for that reason, have nothing to lose by suing.
What happens to claims in the system? In 2012-2012, 46,100 unfair dismissal claims reached a conclusion. 37,400 were disposed of prior to the main hearing (by settlement, or the claim or defence being struck out) and 8,700 reached a final hearing. Of these, 3,900 succeeded and 4,800 failed.
By my reckoning, the unfair dismissal “success rate” (ie the proportion of full merits hearings won by claimants in 2011-2012) is therefore 45%. This marks a distinct fall from 2010-2011 (4,200 of 9,000 hearings or 47%) and 2009-2010 (5,200 of 9,700 hearings or 54%). There are two plausible types of explanation:
One, the claims being presently before the Tribunal are objectively “weaker” than they used to be (maybe because during a recession there are different kinds of dismissals and these are for some reason harder to win).
Two, the claims being presently before the Tribunal are objectively just as weak and just as strong as they ever were, all that has changed is that Tribunal Judges and panelists have been less likely to decide them in workers’ favour, down to the Judicial equivalent of compassion fatigue (perhaps because Judges feel that dismissals are more pervasive during a recession and will expect less of an employer who dismisses workers, or because there has been an enormous press campaign about vexatious claims and Judges have been hardened by it).
My own feeling is that the second of these two explanations is more plausible, in that even 2009-2010 postdated the economic crisis, and was a year with lots of redundancies (as was 2011-2012), and in any event redundancy dismissals shouldn’t be harder to win than other kinds of dismissals, eg for conduct, and try as I might I can’t think of any plausible “objective” reason why success rates should have dropped by 10%.
Of the 3,900 claims which succeeded at a hearing, 5 resulted in orders of reinstatement or re-engagement.
This figure shows no real movement from 2010-2011. To be honest, I was expecting a movement upwards, as friends who are Judges had passed on conversations with the most recent judicial appointees suggesting that some members of the new intake had become keener on these orders. And also because some reinstatement orders made in this period have been subject to appeal (and have been determined by the EAT). A diligent researcher could therefore probably name, by checking only publicly-available documents, each of the individual workers who benefited from every re-engagement order made in 2011-2012.
I argue in my book that the reluctance to make reinstatement orders is a disgrace on the Tribunal system (and I certainly do not put it down merely to Judges; claimant lawyers are equally at fault for not guiding our clients to ask for it) and I won’t repeat those points here.
The median award for unfair dismissal was £4560, marginally down from £4591.
The success rates for discrimination claims remains low, and race remains near the bottom (15% as compared to 33% for sex). There has also been a fall in the success rates in age discrimination claims (down to 14%). By way of comparison, two years ago, 38% of sex discrimination claims that made it to a final hearing and 22% of age discrimination claims succeeded. As with the declining success of unfair dismissal claims, it is hard to put this down to anything other than a general hardening of judicial attitude towards claims.
Within discrimination claims there is a truly dramatic disparity between the highest awards and the median awards. In discrimination, the highest award was £4.4 million (it is large enough to seriously skew the average award); the median award was just £5,256.
The number of discrimination claims has not risen but fallen by over 10,000 altogether – although unevenly. There have been big falls in the number of age and sex discrimination claims (down from 6,800 to 3,700 and from 18,300 to 10,800 respectively), smaller falls in race, equal pay and sexual orientation, and modest rises in the number of disability discrimination and religion or belief claims (up from 7,200 to 7,700 and from 880 to 940 respectively). The papers who predicted discrimination claims would soar in 2012 were wrong, although (for the reasons I gave at the time), they always were going to be.
Finally, there has been an increase in costs awards – up from 487 to 1411 (with 800 of them being awarded in a single multiple-claimant case). If this anomalous, multi-claimant, case is excluded, 81% of costs awards are made to Respondents (although Respondents only succeed at 38% of final hearings) and the median costs award is £1730. To give a sense of their prevalence, while some of the costs awards would have been made at interim hearings, or even following settlements or withdrawal, these 612 costs awards need to be compared to the 43,000 final hearings in the ET system. It’s not a bad rule of thumb to say that around (strictly speaking, less than) one in sixty final hearings ends in a costs decision.