Delays in Employment Tribunals: Could the government’s focus on economic growth help?

Employers and HR professionals involved in employment tribunal cases in recent years will have no doubt experienced frustrations associated with the time it takes for cases to move through the system. This isn’t good for anyone. But do problems within the justice system also hinder economic growth?

The rising backlog in the employment tribunal system

Charlotte Carey, solicitor in AfterAthena’s employment team, recently covered the situation of backlogs in the UK employment tribunal process.

In this piece, it was reported across January to March 2025 that new tribunal claims had grown 11% year-on-year (based on total receipts). Total open caseload stood for this time period at 745,000, a 14% year-on-year increase.

In some cases, parties are waiting years for a final hearing date.

The link between the justice system and economic growth

Diane Coyle, Professor of Public Policy at the University of Cambridge, believes that ‘how the law functions is of fundamental importance for economic growth’. Referring to a sustained drop in funding, she explains that Justice is an unprotected government department, which continues to be a low priority to others. In her view, the legal system should be regarded as part of the national infrastructure, just as much as electricity networks and health.

Professor Coyle refers to difficulty in discerning the economic impact of the problems in the justice system but states there is solid evidence that slow and unpredictable justice is known to have a detrimental effect on the economy. When referring to the employment-related impact of these problems, she is sure that:

‘Employers may be unable to recruit staff until a tribunal case is settled; meanwhile, employees can’t find a new job. And small businesses may be unable to get bills paid, even for large amounts well over what their cash flow can sustain.’

Further, we know from working closely with employers and HR professionals, that respondents spend a lot of time handling employment tribunal claims, meaning that the impact of any backlogs in the tribunal system leads to additional disruption in the handling of day-to-day business.

What is the government doing to address problems in the tribunal system?

The government has taken some action aimed at improving matters:

• Increased tribunal hearing capacity to 33,900 days in the 2025/26 period.
• Efforts are underway to recruit additional judges and tribunal members.
• Proposed an extension to the time limit for bringing tribunal claims from three months to six months under the Employment Rights Bill, to give more time for dispute resolution prior to litigation and for claimants to take legal advice.

Will the Employment Rights Bill help or hinder the tribunal system?

While the Employment Rights Bill intends to improve fairness and access to justice, other changes proposed are set to increase opportunity for employees to issue claims, such as unfair dismissal becoming a day one right. With this comes a real risk there will be a surge in claims, leading to an increase in backlogs and delays.

Further, Acas reported last year that there are exceptional demands on its service, which will have an impact on the ability to resolve disputes outside of the tribunal system.

Is increased funding of the employment tribunals on the horizon?

There is growing recognition within the government of the broader economic implications of the current pressures on the tribunal system. The Treasury has expressed concerns over the cost of the Employment Rights Bill, particularly the risk of overwhelming an already backlogged tribunal system.

However, apart from the measures referred to above, there is currently:

• No confirmed commitment to increase tribunal funding
• No formal assessment of how tribunal delays are impacting economic growth

It remains to be seen whether increased pressure on the government will lead to a review of issues within the tribunal system as we get closer to the changes proposed under the Employment Rights Bill coming into effect.

Need help in navigating employment tribunals or risk of tribunals?

From our fixed-rate employment law retainer options, with insurance to protect you against litigation costs, or ad-hoc tribunal support, AfterAthena’s solicitors are on-hand to support your business.

Contact us today to speak to an expert.

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