As we all try to assess the continuing impact of the Employment Tribunal fee regime – see the Hard Labour Blog for some excellent analysis of that – Acas have published the latest figures on their early conciliation scheme.
Acas have always offered conciliation in Employment Tribunal cases and a very good service it is too. However since May this year, potential claimants have been forced to contact Acas before even initiating a claim. Attempts at conciliation are then made which lead either to a binding settlement (called a COT3) or to the potential claimant being given a certificate which allows him or her to take the claim on to an Employment Tribunal.
Acas is doing its best to sound pleased by the latest figures which show them being contacted just over 37,000 times in the first six months of the scheme being operational. Acas notes that very few parties refuse to participate in the process, but then report that in between April and June just 18% of the contacts made result in a COT3 settlement. In other words, in the first three months of the scheme (we aren’t given the six month figure), early conciliation has removed just 3046 claims from the system.
I’m not too surprised by that. If I were an employer I would be unlikely to settle a case without seeing the claim put in writing so that I can properly assess the likely outcome and then seeing if the employee is able or keen enough to pursue it by paying the ET fee.
A majority of claims do not proceed
What is particularly interesting about these figures is that Acas is reporting what proportion of the contacts made between April and June this year went on to become Employment Tribunal claims by the end of October. A total of 4,198 claims went on to the Tribunal – 28 per cent of the total contacts made. However, 9,918 of the cases did not progress to a Tribunal claim. That is 58 per cent of the total claims notified in that period.
That is not a healthy figure. It suggests that a clear majority of those who contact Acas because they think they have a claim against their employer that is worth pursuing do not, in the end, pursue it.
Now it may be that those cases were doomed to fail in any event. Perhaps after discussing the case with Acas or hearing the employer’s response to their claim, those individuals realised that they were going to lose in the Tribunal and decided not to proceed. If that is what is happening then that is a good thing. But if that really is the explanation then we will inevitably see a marked increase in the success rate of the claims that are brought before the Tribunal. If the weak cases are being weeded out by early conciliation then it follows that it is the stronger cases that remain.
I very much doubt that future ET statistics will show that happening. To believe that the claims that are not progressing to Tribunal are mainly weak cases that should never have been brought in the first place you have to really want that to be true. Common sense tells us that the dramatic fall in cases that we have seen over the past year cannot possibly be explained merely by employees realising that they don’t have a valid claim. The fee regime is protecting employers who behave unfairly, discriminate against employees, or who fail to pay them what they are owed.
Our employment law system is broken – and these new figures from Acas support that view.
NB: first version of this post referred to 3046 COT3 settlements in the first six months of the scheme when the figure only refers to the first quarter. Thanks to Richard Dunstan (Wonkypolicywonk) for spotting the error.
A Range of Reasonable Responses 
That final sentence is going to go down as a classic in #ukemplaw history, Darren! V much agree.
For me, one of the most interesting aspects of the Acas stats is that their figure for the total number of case notifications (37,404 in 6m, so some 75,000 over a full year) is significantly higher than the number of ET cases in any year since 2001-02, with the exception of 2009-10, when it peaked at 78,700. In 2012-3, there were just 60,808 ET cases (and the trend was slightly downwards). To my mind, this strongly suggests that some 15,000 of the 75,000 EC notification cases a year are cases that would not have gone to the ET even without fees. That is, some people who would not issue an ET claim, even without fees, perhaps because of the hassle/time/anxiety involved, are nevertheless using EC to ‘have a go’ at their employer. We all know that the number of ET cases is just the tip of the iceberg – there are many more workplace ‘disputes’ out there that have never reached the ET system. And Acas now appears to be picking some of them up. I’ll need to check whether the impact assessment predicted any such effect, but I’m fairly sure it wasn’t a policy objective!
OK, further to my earlier comment, I dug out the BIS final impact assessment of EC (issued Feb 2014), and my head now hurts a bit. A few thoughts:
1) the impact assessment is generally a pile of pants, and in particular over-estimates the £ benefit to employers of introducing EC, by wrongly assuming a steady state number of ET cases (NB not claims) of 95,245, when in fact (as I noted earlier) in 2012/13 there were just 60,808 ET cases (and the trend was downwards). Furthermore, the impact assessment fails to make any downwards adjustment to reflect the impact of ET fees. In fact, by the time EC came into force, there were just some 21,000 ET cases per year, so applying the impact assessment’s (questionable) calculation that EC would reduce the number of ET cases by 17% gives a saving to employers of just £13.9m, less than a quarter of the impact assessment’s figure of £64.6m.
2) the 15,000 ‘extra’ EC cases to which I referred in my earlier comment might well just reflect the fact that, according to the impact assessment, Acas dealt with an average of 15,780 cases under Pre-Claim Conciliation (PCC). At first glance, those figures fit very well …
3) HOWEVER … the projected annual number of COT3s achieved under EC (3,046 x 4 = 12,184) is LESS than the average number of COT3s achieved under PCC in the last 3 years (12,441), as given in the most recent Acas annual report. Sure, the number of cases ‘removed from the ET system’ by EC is more than just the number of cases that result in a COT3, but it does seem remarkable that introducing EC has reduced the number of (pre-ET) COT3s.
Or am I (once again) missing something?
I don’t necessarily disagree with your analysis about the fee regime discouraging potentially meritworthy claims; I have first-hand experience of claimants not lodging claims because they can’t afford the fees and don’t qualify for remission. However, I wouldn’t be too quick to assume that employees only contact ACAS because they think they have a claim worth pursuing. My experience is that my main Respondent client now has a very significant number of EC requests – far more than it used to have claims – and many of them are completely without merit and not followed up with a claim form when I tell ACAS “no can do”. Similarly, ACAS officers have told me they get a heap of calls that are about nothing in the least meritworthy – e.g. “I think we should get more bank holidays”. Now that fees will be refunded to the winner by the loser, I do wonder however whether ACAS isn’t occasionally being used as a kind of “letter before action” to see if it can prompt a “down and dirty” settlement for spurious issues when the employee would have no intention of parting with over £1k to see it through to a hearing.
If I’m right, then the ACAS figures can’t be relied on as “proof” of anything much. Then again, I don’t disagree with the suggestion that the system itself was already broken, from around mid-July 2013…
Yes, it’s me again. Now I’ve been reading more of the Acas annual report. And, further to my point 2), above, the annual report gives a figure of 22,723 for the average number of cases that Acas dealt with under PPC over the last 3 years. Which is rather different to the BIS impact assessment’s figure of 15,780, and doesn’t fit quite so neatly with my figure of 15,000 cases on top of the expected number of ET cases. Make of that what you will.
It would be good to have some input from Acas on all this, but Acas appears more interested in presenting EC as a great success than in establishing & presenting what’s actually going on.