A detailed research report commissioned by the Employment Lawyers Association (ELA) has been published, that considers the operation of the employment tribunal system and proposes significant reforms intended to reduce delays and improve access to justice. The proposals include changes to the Acas Code of Practice on disciplinary and grievance procedures, an overhaul of early conciliation, amendments to ET1 and ET3 forms, and the introduction of a multi-track system based on the value of claims.
Background: why the system is struggling
The report notes that employment tribunals were originally intended to provide an accessible forum for resolving disputes that could not be dealt with in the workplace. Over time, the scope of tribunal litigation has expanded and cases have become more complex. The process now often resembles civil litigation.
In addition, there has been a significant increase in the volume of claims over the years, and although there has been some additional funding, this has not kept up with inflation and the number of judges and tribunal staff has not increased in proportion to the tribunals' caseload.
As a result, delay is a central concern. In some regions, backlogs mean that claims take several years to reach a final hearing. That delay increases legal costs and places a significant burden on individuals and organisations. It also reduces the likelihood of settlement, because parties can become more entrenched in their positions over time.
The report is particularly critical of what happens before claims are issued. Formal grievance procedures are meant to promote early resolution of workplace conflicts, but in practice they often encourage defensive behaviour. Acas Early Conciliation is frequently treated as a procedural tick-box exercise rather than a genuine opportunity to resolve the dispute. By the time a claim is issued, the focus has usually shifted away from addressing a workplace problem.
The report comments that employment disputes are generally framed too narrowly as legal disagreements. While legal rights are clearly important, most disputes arise from the breakdown of working relationships. Processes that focus only on legal entitlement often fail to address the causes of conflict.
Against that background, the report makes several recommendations for change, some relatively minor and others much more radical.
Pre-litigation recommendations
One key recommendation is that the Acas Code of Practice on disciplinary and grievance procedures should be amended to make clear that parties must attempt to resolve issues informally before a tribunal claim is brought, and that formal steps should only be used if informal attempts at resolution are unsuccessful. The Code should emphasise and encourage workplace mediation, and the power for tribunals to uplift or reduce damages where there has been an unreasonable failure to follow the Code where informal resolution attempts have not been made.
Alongside this, a new Employment Resolution Service (ERS) should be established. The ERS would operate as a first port of call for both employers and employees, providing information and guidance. It would encourage and facilitate workplace mediation where appropriate. If, despite support, a dispute could not be resolved informally, the ERS would operate as a triage service to determine how the dispute should be handled. Cases involving basic rights could be referred to a Fair Work Agency (FWA) for investigation and enforcement. Issues that appear easy to resolve could be directed to a phone conciliation service. The parties in more complex matters could be offered an online mediation service provided by the ERS. Participation in phone conciliation or online mediation would be mandatory before a party could bring an employment tribunal claim. If claimants failed to engage, their claim could be struck out, and if respondents failed to do so, then an award may be made against them.
Recommended changes to tribunal process
Among the more minor recommendations is the rewriting of ET1 and ET3 forms. Under the proposals, a claimant would identify (in non-legal language) what sort of claim they are bringing, e.g. a claim about losing their job, or things that happened to them while working. The form would then ask relevant follow up questions in simple language to elicit further details. Claimants would be asked to provide a short narrative, subject to a word limit. The forms would also require parties to upload certain specified documents at the outset, e.g. a dismissal letter in an unfair dismissal claim, and evidence of earnings to support the automatic creation of a schedule of loss.
The report also recommends increasing the limit on breach of contract claims in the employment tribunals from £25,000 to £100,000 to avoid overlap of jurisdictions between the employment tribunals and the county court.
Another focus is on enforcement of awards. The report highlights that obtaining a tribunal judgment does not always lead to payment. It recommends that tribunal awards should have the same status as a county court judgment and should be enforceable through the usual county court processes. In addition, the FWA should be given the resources to enforce payment of tribunal awards in full, and should consider investigating employers in any case of non-payment.
The most radical proposal is the introduction of a structured tribunal track system. At present, all claims follow broadly the same process despite clear differences in scale and complexity. The proposed system would allocate claims to one of three different tracks:
- Track 1: claims for less than 6 months' earnings, or up to £20,000 would be considered initially by a legal officer, with referral to a judge only if that did not resolve the issues. Paperwork would be limited (e.g. 25 - 50 pages), hearings would take place online, the maximum hearing length would be three hours and judgments would be given orally. There would be no fee to bring a claim, and no costs consequences.
- Track 2: claims for up to 2 years' earnings would also first be considered by a legal officer, with referral to a judge for directions if not resolved. A compulsory half-day early neutral evaluation (ENE) hearing before a judge would take place. If still not resolved, the case would go to hearing (maximum 5 days) within a specified timeframe. There would be strict case management, limits on bundles and witness statements, and an oral judgment only. There could potentially be a fee to bring a claim, and there would be a limited costs regime (where an offer made after ENE was not beaten).
- Track 3: claims for over 2 years' earnings, or where the claimant chooses this track. These claims would be handled by the same judge throughout and subject to close case management. Private mediation or ENE, or a 1 day court ENE would be required. There would be detailed procedure rules on disclosure, bundles and witness statements, akin to the Civil Procedure Rules. Judgments would be issued in writing. There should be a fee to bring a claim, and there would be a full costs regime as is the case in the civil courts.
For claims that might sit in track 1 or 2, the parties would be able to say which track they considered appropriate, but a judge would have the final say. For claims that might sit in track 2 or 3, the claimant should be able to choose which track to use - effectively, deciding between limiting the value of their claim in exchange for faster resolution and a lower costs risk, or seeking potentially unlimited compensation but with higher costs risk.
The aim is to improve proportionality and reduce delay. By managing cases differently from the outset, tribunals could cut unnecessary steps in lower‑value claims and prevent them being caught up with more complex cases. The proposal also supports earlier resolution by moving away from the assumption that all disputes must proceed to a full adversarial hearing.
What does this mean for employers?
The report was commissioned by the ELA and it is not clear whether all or indeed any of its proposals will be taken forward by the government. If the proposals are taken forwards, it is likely to be some time before any of them takes effect. In the meantime, the changes being introduced by the Employment Rights Act 2025 are likely to add to the burden on the current employment tribunal system. In particular, the increase in the time limit for tribunal claims from three months to six months, which is expected to take effect in October 2026, and the reduction in the qualifying period and removal of the compensation cap in unfair dismissal claims, which will take effect from 1 January 2027, are likely to lead to a significant increase in the volume of claims being brought.
The report points towards a system in which employers are expected to engage earlier with workplace conflicts and to do so in a more constructive way. Even if not all of the report's recommendations are taken forward, employers may wish to bear in mind the questions it raises about the current tendency to focus on formal and legal resolution of disputes, and consider training managers to ensure they have the skills needed to address conflict at an early stage, before positions become entrenched.
