Employment tribunal claims limits set to double

The government has proposed extending the time limit for bringing employment tribunal claims from three months to six months. The amendment to the Employment Rights Bill was published on 27 November 2024 with an implementation date probably in 2026. While it’s good news for claimants, it is likely to mean an increase in the number of claims overall adding strain to an already burdened employment tribunal system. We’ll speak to an employment lawyer about the repercussions of this change to the rules and the likely impact on employers.

Currently most employment tribunal claims, including those for unfair dismissal, discrimination, and unlawful deduction from wages, must be filed within three months of the incident. The proposed change would allow claimants six months to bring forward their claims, aligning with the existing time limits for statutory redundancy pay and equal pay claims. The government says change is designed to give individuals more time to assess their situation, seek legal advice, and work through internal workplace grievance procedures before resorting to legal action. The Law Commission recommended this change in 2020, noting that the three-month limit was challenging for many claimants.

The strain on tribunal system would, of course, be helped by an increase in the number of cases being settled but it seems the opposite is happening. According to the latest Ministry of Justice data the tribunal system received 10,000 single claims in the second quarter of 2024, marking a 19% rise compared to the same period in the previous year. However, disposals dropped by 4% in this period, adding to a growing backlog of unresolved cases. 

So let’s hear more on this. Rebecca Sulley is an employment lawyer with extensive tribunal user experience and earlier she joined me by phone from Birmingham to discuss it: 

Rebecca Sulley: “So the idea behind increasing the time limits from three to six months is, I believe, a kind of a recognition of the fact that often grievance processes are taking a bit longer to be done internally, and it's thought that it doesn't give claimants as long to resolve those internally before moving to a tribunal process which is where the idea of extending to the six months has come from. From our perspective, and from a lot of our employer clients’ perspective, it is something that they are concerned about because it's not simply a case of extending from three to six months because you also have to take into account the fact that there is a six-week Acas early conciliation period. So actually, at the present time claimants have around about four and a half months taking into account this time, and that will obviously be extended with the six-month deadline. Add to that the fact that it's taking tribunals in some areas of the country up to six months to send out a claim form it might be that employers aren't finding out about claims until a year after the individual has been dismissed which is a significant period of time to not know whether or not to expect a claim from that individual.”

Joe Glavina: “The consensus around this change, Becci, is it will result in more claims being brought which in turn will mean more delays. Would you agree with that?”

Rebecca Sulley: “Absolutely. The Employment Rights Bill itself is expected to bring a higher volume of claims, given all the day one rights. So added to that, the fact that people will have longer to consider whether or not to bring a tribunal claim, the claim numbers are, in my view, only going to rise and we're already seeing delays of eighteen months to two years between a claimant putting their claim in and it going to full hearing. I can't see that coming down unless the government put a huge amount of additional funding into the tribunal system and into Acas which will be the body who will initially be expecting to handle all of these new potential claims that are coming through. So, absolutely, I think we will see longer delays at the tribunals.”

Joe Glavina: “The suggestion is that extending the timeframe for bringing claims will at least give employers more time to resolve disputes internally, so a greater focus on employers’ grievance procedures and grievance handling.” 

Rebecca Sulley: “I think it's important to make sure that clients are adopting prompt time frames in which to hear grievances because it's in no one's interest for a grievance to be going on six months, or an appeal to be going on six months post dismissal. So absolutely, there continues to be that emphasis that you should resolve disputes as quickly as possible. But it also, I suppose, potentially means that there is a longer period of time in which you might find the individual is coming back to the employer to try and negotiate a settlement package and that might be helpful in some cases where you need longer to see whether the individual gets another role or to see what can be offered. But ultimately it just gives a greater uncertainty for the employer as to whether or not a claim is going to be issued given you've got a whole six months from the dismissal.”

Joe Glavina: “I see the HR press quotes various lawyers saying firms will need to adjust their data retention policies to preserve records for longer when the limitation period for bringing claims is doubled to make sure that evidence remains available for potential claims. What do you say to that?” 

Rebecca Sulley: “It's only worth employers looking at their data retention policies. Many employers will have relatively lengthy policies for keeping data anyway so it might be that it isn't impacted by it, but it's certainly something worth considering, and if you have different retention policies based on, for example, an individual's length of service, given that there'll be ‘day one’ rights, again it might be something that you need to have a look at to see if they accurately reflect the risks of potential claims for these new categories of individuals who will be able to bring claims.”

Joe Glavina: “Once the time limit for bringing claims goes from 3 to 6 months it will increase the risk of witnesses leaving the business before the case gets to a hearing. What's your advice to clients on that point?”

Rebecca Sulley: “So it's becoming more and more common, given the delays at the tribunal service for key witnesses to leave the business prior to a hearing and whilst, before they leave, they might say they're happy to give evidence we find that, invariably, they move on to a new employer and they are reluctant to give evidence so it's certainly something that clients should be considering. What we would say is, if you are exiting an individual via a settlement agreement and you think there might be a potential claim where they could be a witness, that you would include a clause in there that they agree to give witness evidence in the tribunal. Now that might not always be the case, and you might not be able to agree settlement agreements with these individuals, and we might see a greater increase in the use of witness orders being used if it is a key witness, whereby the tribunal can order that they attend, but the downside of that is that you have a potentially hostile witness. So unfortunately, what I think is more likely to happen is that employers will be having to carefully consider whether or not they need to settle more of these claims if a key witness has left the business.”

The figures we quoted earlier from the Ministry of Justice are the quarterly figures for employment tribunals for April to June 2024. We’ve included a link to those in the transcript of this programme for you.

- Link to Ministry of Justice quarterly statistics: ‘Tribunal Statistics Quarterly: April to June 2024’