Legal expenses insurer raises concerns over Employment Rights Bill amid employment tribunal backlog 

Rates of claims resolution continue to fall as the Employment Rights Bill looming

The Employment Rights Bill, recently introduced by the UK government, aims to expand protections against unfair dismissal from the first day of employment.

However, ARAG, a leading legal expenses insurance provider, has warned that this legislative change could overwhelm the already strained employment tribunal system.  

ARAG’s analysis of recent data from His Majesty’s Courts and Tribunal Service (HMCTS) reveals a backlog exceeding 45,000 cases, with some hearings now scheduled as far off as 2026. The number of open cases has increased by over 20% in the past year, and the disposal rate of claims is at its lowest since the pandemic.  

Under the new bill, employees will gain immediate rights to claim unfair dismissal, removing the current two-year qualifying period. ARAG’s claims director, Chris Millward, expressed concern over the tribunal system’s capacity to handle the anticipated influx of claims: 

“The employment tribunal system simply isn’t in a fit state to cope with any more claims,” said Millward. “Backlogs have been growing for some time already, leaving both businesses and employees waiting years to resolve disputes.” 

The bill’s potential to increase claims places additional strain on small and medium-sized enterprises (SMEs), which often face uncertainty and hesitation in investment decisions due to drawn-out disputes. ARAG argues that reforming the tribunal system is essential if the government wishes to deliver on its commitment to enhance employment rights. 

Data from HMCTS for April to June indicates an 18% increase in single claims compared to the same period last year, with the open caseload at 45,214 by the end of August. While claim submissions continue to rise, the rate of claims being resolved has fallen, with a 4% decrease in disposals year-on-year for the quarter ending in June. 

As waiting times extend, Millward emphasised the urgency of addressing these systemic issues, stating, “If the government is serious about improving day-one employment rights, it will have to fix the employment tribunal system first.” 

Image: © shironosov via Canva 

Josie Geistfeld Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.geistfeld@barkerbrooks.co.uk