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Employment Tribunals | Figures reveal marked increase in number of cases and compensatory awards
Written by Susie Lockhart on 5 November 2024
The latest annual Employment Tribunal statistics are out, covering the period from April 2023 to March 2024, and they reveal a concerning trend for employers. Most notably, total claims have increased from 86,000 to 97,000 – a nearly 13% rise – and for certain claim types, the sums awarded to employees have increased.
Tribunal fees were abolished in July 2017 after the UK Supreme Court ruled them unlawful, meaning it now costs employees nothing to bring a claim. Since then, claims have risen significantly; for context, 88,461 applications were lodged in 2016/17, and 83,015 in 2015/16. This year’s total therefore represents an increase of roughly 10-17% compared to pre-fee-abolishment levels.
What’s more, with a swathe of new workers’ rights anticipated under the upcoming Employment Rights Bill, employers should brace themselves for a further increase in Tribunals, particularly due to the government’s pledge to making unfair dismissal a day one right, which will benefit almost 9 million employees.
Indeed, according to our recent poll, nearly two-thirds of employers (59.4%) are concerned about the heightened risk of litigation resulting from impending changes to employment law.
The rising cost of claims
With the release of new statistics, the question most employers will be asking is: How much is an Employment Tribunal claim likely to cost me in 2024?
The table below outlines the maximum, median, and average awards across various case types for 2023/24. It’s important to note that the “maximum award” represents the highest amount actually granted in a specific case; the maximum amount that could potentially be awarded may be significantly higher.
Claim type | Maximum Award | Median Award | Average Award |
Unfair dismissal | £179,124 | £6,746 | £13,749 |
Race discrimination | £431,768 | £10,253 | £29,532 |
Sex discrimination | £995,128 | £16,161 | £53,403 |
Disability discrimination | £964,465 | £17,218 | £44,483 |
Religion and belief discrimination | £20,000 | £8,500 | £10,750 |
Age discrimination | £261,949 | £86,349 | £102,891 |
Sexual orientation discrimination | £47,297 | £26,693 | £27,070 |
For comparison, here are the figures from 2022/23:
Claim type | Maximum Award | Median Award | Average Award |
Unfair dismissal | £184,200 | £6,201 | £11,914 |
Race discrimination | £454,474 | £11,400 | £23,070 |
Sex discrimination | £419,353 | £11,177 | £37,607 |
Disability discrimination | £1,767,869 | £15,634 | £45,435 |
Religion and belief discrimination | £92,039 | £9,239 | £19,332 |
Age discrimination | £84,723 | £5,675 | £14,210 |
Sexual orientation discrimination | £82,168 | £26,247 | £31,623 |
There’s a lot to unpack from these figures, but here are five key takeaways:
- The average award for unfair dismissal has risen 15% – from £11,914 to £13,749. Additionally, of the 646 unfair dismissal claims that resulted in awards of compensation in 2023/24, the highest amount awarded was £179,124. This will have occurred in a case where the statutory cap doesn’t apply, such as those involving whistleblowing or health and safety-related dismissals. Issues with employees can escalate very quickly to a situation where you are facing a potentially very costly unfair dismissal claim. Time spent considering options and risks can be time well spent.
- Average awards for most types of discrimination claim are down year on year. However, average awards for race discrimination and sex discrimination have risen – from £23,070 to £29,532 and from £37,607 to £53,403 respectively. This is perhaps due to an increased awareness and focus on equality, diversity and inclusion in the workplace.
- The average award for age discrimination has risen 624% – from £14,210 to £102,891. However, it’s important to note that there were only 12 awards of compensation for age discrimination during the relevant period, six of which were over £50,000, which explains the unusually high figure. While there are not many cases reaching the Tribunal, it’s clear that when they do, the costs can be very significant.
Did you know? Under UK law, age discrimination is unique in that it can be justified in certain circumstances. Unlike other forms of discrimination, such as those based on race or gender, where justification is much more challenging, age discrimination can be defended if it serves a legitimate aim and is a proportionate means of achieving that aim.
- The highest award issued during the 2023/24 reporting period was £995,128, granted in a sex discrimination case. This marks a significant (137%) increase from the previous year’s highest award of £419,353. The average award has also risen 42%, from £37,607 to £53,403, highlighting a notable upward trend in compensation for such cases. These cases also tend to grab the headlines, perhaps encouraging employees to lodge a claim.
- Generally, the 13% rise in cases suggest that employees are increasingly aware of their rights and, given the current economic climate, more willing to lodge a claim. This trend is likely to grow with heightened media focus on the government’s proposed changes to workers’ rights.
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The true cost to employers
While awards from Employment Tribunals are significant – and, in many cases, increasing – compensation represents just one aspect of the costs associated with claims. Employers also incur legal fees and other expenses in defending against these claims, which can accumulate quickly.
Additionally, the vast majority of employment disputes are resolved before they reach a Tribunal, meaning they don’t contribute to the above statistics. Many of these settlements likely exceed the average and median figures, with some potentially reaching well over £1 million.
And it’s not just the direct costs that employers need to be concerned about – there are hidden costs too. Dealing with a Tribunal claim often demands substantial time and resources, diverting attention away from core business operations.
What can employers do to prevent claims?
For small businesses, a Tribunal claim can be crippling. It can also have a severe detrimental impact on your reputation. Some proactive ways to mitigate potential claims and their associated costs include:
- Training managers on employment law, effective communication, and conflict resolution to prevent missteps in handling grievances, disciplinary actions, and day-to-day interactions.
- Establishing clear policies to ensure managers respond consistently, fairly, and professionally to workplace issues.
- Implementing early intervention strategies, such as mediation and open-door policies, to help resolve workplace issues before they escalate.
- Maintaining accurate records of performance, attendance, grievances, and disciplinary actions to demonstrate transparency and support any actions taken.
- Staying up-to-date with changes in employment law, regularly updating company policies, and consulting legal expertise when needed to ensure compliance and minimise risk.
Employers' other problem: The Tribunal backlog
Perhaps unsurprisingly, the new figures show that the Employment Tribunal blackhole backlog continues to widen. While blackholes are mysterious and not fully understood, the Tribunal system’s problems are much easier to understand – they are understaffed, underfunded, and overwhelmed.
Much is made in the press of the effect the backlog has on claimants, but little is said about the effect it has on SMEs. Tribunal claims are stressful for all involved, and the longer it takes to dispose of a case, the longer it plays on a witness’ mind, leading to a decrease in morale and productivity. From a practical perspective, recollections fade with the passage of time and so this can present difficulties in witness evidence when a case does finally start, sometimes two years down the road.
Employers awaiting a final hearing will naturally be cautious and this often extends to pressing pause on recruitment in case the hearing doesn’t go their way. In turn, this can place additional burden on existing employees, leading to increased stress levels and even resignations.
Employers who are experiencing a delay in a Tribunal case should keep pressure on their representative to make sure they are deploying all practical measures to keep the case moving forward. Witness statements should be taken sooner rather than later to avoid fading recollections, and consider using a settlement agreement for any witness leaving your employment as you can include a provision requiring them to assist with investigations and Tribunal proceedings.
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