Thousands more cases to be piled onto creaking ET system

Employment law reforms will pile thousands of extra cases onto an already stretched tribunal system, government analysis has revealed. The Employment Rights Act, which received royal assent last month, reduces the qualifying period of employment for eligibility to make an unfair dismissal claim from two years to six months. The legislation, which is set to be implemented over the next two years, also removes the cap for compensation awards for unfair dismissal claims.

In what is believed to be the first time the government has specified the effect of the changes, newly-published analysis projects that the volume of cases going through arbitration and the employment tribunal could increase by 17%.

This would mean an extra 21,000 early conciliation notifications to Acas, 6,900 more employment tribunal cases, and 1,300 additional cases which require judicial time, such as a full hearing, the analysis estimates. 

The government stresses that these figures are illustrative and subject to change. They may also be affected by a dispute resolution system taskforce jointly set up by the Ministry of Justice and Department for Business and Trade, aimed at preventing workplace disputes.

The analysis adds: ‘The exact impact on the enforcement system is difficult to predict because the number of cases that enter the system each year fluctuates, and it will ultimately depend on behavioural factors like employers’ willingness and ability to comply with regulation, and employees’ willingness to bring forward a dispute.’

The increase is expected at a time when the backlog of employment tribunal cases has reached unprecedented levels. Last month, government statistics revealed that during the period from July to September 2025, the 'single claim open caseload' was up year-on-year by 33% to 52,000. This far exceeded the previous peak of 44,000 recorded in the third quarter of 2020/21.

Single employment tribunal receipts increased by 33%, while disposals decreased by 10% in Q2 2025/26, compared with the same period a year ago.

During the passage of the bill parliament heard warnings about the effect of allowing more claims to come into the tribunal system. Conservative peer Lord Sharpe told the House of Lords in September the legislation ‘piles more pressure on to a system that is already creaking, creating delay and uncertainty for employers and employees alike’.

A survey by the Federation of Small Businesses last January found 92% of employers had concerns about the changes and 67% expected to recruit fewer staff.