Employment tribunal claims 2025: What UK employers need to know — and what’s changing

Employment tribunal claims are rising – here’s what that means for your business

Employment tribunal claims are rising sharply. In the quarter October to December 2025, single Employment Tribunal receipts were up 54% on the same period a year earlier — and the single claim open caseload has risen 49% over the year. That’s the highest it’s ever been. At the same time, the Employment Rights Act 2025 is about to reshape the landscape of unfair dismissal claims significantly, with major changes coming into force from January 2027.

If you run a business without a dedicated HR or legal team, the risk is real — and it’s growing. Here’s what you need to know, and what’s coming next.

Key statistics at a glance

Sources: Ministry of Justice Tribunal Statistics Quarterly Q3 2025/26 (March 2026); MoJ annual ET tables 2023/24.

Claim volumes: a system under pressure

The most recent quarterly data (October to December 2025) shows single ET receipts up 54% on the same quarter a year earlier, while disposals fell 34%. Claims are coming in faster than ever. Cases are being cleared slower than ever. The gap is widening.

Over the full 2024/25 financial year, total tribunal receipts across all tribunal types rose 11% while disposals fell 9%, producing a 14% increase in the overall open caseload to 745,000 by the end of March 2025. By December 2025, the overall tribunal open caseload had reached 831,000 — its highest level since 2013/14.

Single ET claim open caseload now stands at 58,000. To put that in context — it’s higher than at any point during the pandemic. The system has never been more backed up.

What this means for employers: For you, that means a longer wait between a claim being lodged and a hearing — and more time with uncertainty hanging over your business. ACAS early conciliation is the first step any claimant must take before bringing a claim, and settling there is almost always faster and cheaper than going to a full hearing. But that only works when you have the right advice from the moment a grievance first surfaces.

Award levels by claim type (2023/24)

The most recently published compensation data covers 2023/24. Award data for 2024/25 is not yet available — HMCTS is in the process of extracting and quality-assuring compensation figures from its new case management system, which was introduced as part of a wider ET reform programme.

Source: Ministry of Justice Tribunal Statistics Quarterly Q3 2025/26 (March 2026), incorporating 2023/24 annual ET compensation tables. 2024/25 award data not yet published — HMCTS data extraction ongoing.

A note on the unfair dismissal cap: From April 2025, the compensatory award cap for unfair dismissal increased to £118,223 (or 52 weeks’ gross pay, whichever is lower). From 1 January 2027, this cap will be removed entirely under the Employment Rights Act 2025. That represents a fundamental shift in unfair dismissal risk for employers.

The backlog problem: what it means in practice

Employment tribunal waiting times are a significant and growing problem. In July to September 2025, ET disposals fell 10% compared to the same period a year earlier, while receipts rose 33%. The gap between claims coming in and cases being resolved is widening.

For employers, this creates a sustained period of uncertainty and cost between the point a claim is lodged and the point it is resolved. ACAS early conciliation — which all claimants must go through before they can submit a claim — provides an important opportunity to explore settlement without a hearing. The cost of defending a claim through to a full hearing, even where you win, is substantial.

Practical implication: The earlier you get expert employment law advice when a problem arises — before a grievance escalates, before a disciplinary goes wrong, before someone is dismissed — the more options you have, and the lower the cost of resolution.

What’s changing: Employment Rights Act 2025

The Employment Rights Act 2025 received Royal Assent on 18 December 2025—bringing with it the biggest shake-up to employment law in a generation. Changes are rolling out in stages through 2026 and 2027. Here’s what matters most to you as an employer.

Changes already in force (early 2026)

• From 18 February 2026: dismissal for taking part in industrial action became automatically unfair, removing the previous 12-week limit.
• From 6 April 2026: Statutory Sick Pay reforms — the lower earnings limit and waiting period have been removed, meaning more workers qualify from day one of absence.
• From 6 April 2026: paternity leave and unpaid parental leave become day-one rights.
• From 6 April 2026: sexual harassment whistleblowing — disclosures about sexual harassment now qualify for whistleblower protection.
• From 6 April 2026: the sexual harassment duty is strengthened from taking ‘reasonable steps’ to taking ‘all reasonable steps’ to prevent harassment. Failure to comply carries a 25% uplift on tribunal awards.
• From 7 April 2026: the Fair Work Agency is established to enforce employment rights.

Changes coming from October 2026

• Collective redundancy protective award maximum doubled from 90 days to 180 days’ pay — significantly increasing the financial risk of collective redundancy processes that are not properly managed.

Changes coming from 1 January 2027 — the most significant for SMEs

• Unfair dismissal qualifying period reduced from 2 years to 6 months. Any employee who has been in post for six months or more on 1 January 2027 will immediately gain protection. In practice, this means anyone you hire from around July 2026 onwards will qualify for protection by January 2027. The government estimates 6.3 million additional employees will gain protection.
• Unfair dismissal compensatory cap removed entirely. Currently capped at £118,223 (or 52 weeks’ gross pay). From 1 January 2027, there will be no cap — making unfair dismissal financially equivalent to discrimination claims, where awards are already uncapped.
• Tribunal time limit extended from 3 to 6 months. Claimants will have twice as long to bring a claim, increasing the window of exposure for employers.
• Fire and rehire restrictions take effect. Dismissal and re-engagement on worse terms becomes automatically unfair in most cases for ‘restricted variations’ — changes to core contractual terms including pay.

What this means for SMEs now: January 2027 is approaching faster than many employers realise. The combination of a shorter qualifying period and an uncapped compensatory award materially changes the risk profile of every employment decision you make — especially around performance management, disciplinaries, and dismissal. Best practice probationary period management will need to be front-loaded into the first three to four months of employment, not left to the six-month mark.

Why good employers still lose at tribunal

Tribunal findings rarely turn on whether the employer had good reason to act — they most often turn on whether the employer followed a fair process. The most common reasons a well-intentioned employer loses at tribunal include:

• Failing to follow a documented disciplinary or capability process before dismissal
• Not giving the employee a proper opportunity to respond to allegations
• Inconsistent treatment — acting differently in similar circumstances
• Inadequate investigation before taking disciplinary action
• Relying on verbal warnings or informal conversations without written records
• Missing the ACAS Code of Practice requirements for disciplinaries and grievances
• Acting on a protected characteristic (age, disability, sex, race, pregnancy, religion) even inadvertently

Under the ERA 2025 changes, the stakes of getting process wrong are significantly higher. An uncapped compensatory award combined with a six-month qualifying period means the cost of a procedurally flawed dismissal in 2027 could be far higher than it would be today.

How Citation clients compare to national averages

Those are the national averages. For Citation clients, the picture looks very different.

*Citation HR client statistics vs national averages. **Covered claims only — claims where Citation’s Advice Guarantee or Commercial Advice Promise applies. ***Based on a chargeable rate of £275/hour and an average of 11 working days per case.

The Advice Guarantee means that when you follow Citation’s advice, we’ll defend you against employment tribunal claims — no separate insurance policy required, no excess, no add-on purchase needed. The Commercial Advice Promise extends that protection to pragmatic commercial decisions, not just the safest legal route.

With the Employment Rights Act 2025 changes approaching, having that protection in place before January 2027 — when the qualifying period shortens and the compensatory cap disappears — is more important than ever.

Three things worth doing before January 2027

Rising volumes, growing backlogs, and a wave of new legislation — there’s a lot coming. Here’s where to focus your energy first.

Three practical priorities before January 2027:

• Review your probationary period process. With the qualifying period dropping to six months, performance and capability decisions need to be made and documented in the first three to four months, not left to the last minute.
• Check your disciplinary and grievance procedures are up to date and ACAS Code-compliant. Procedural fairness is the most common reason employers lose claims they could have won.
• Make sure your tribunal protection is in place before you need it. The best time to get advice is before a situation escalates — not after a claim has been lodged.

Ready to get protected? Call us on 0345 844 1111 or book a free consultation to speak to our team. We’ve got your back.