Fair work and the Employment Tribunal "emergency"

What steps is the Government taking to allay the pressures on the ET – and will these go far enough? A version of this article first appeared in Employer News 24 March 2026

Last week’s Employment Tribunal statistics show that pressure on the UK’s Employment Tribunal system continues to grow.

In Q3 2025 there were around 52,000 open cases, increasing to 58,000 by the end of December 2025, an increase of roughly 11–12% in just one quarter. The widening gap between claims received and cases disposed of is another worrying trend. Caspar Glynn KC, the Chair of the Employment Lawyers Association has declared an Employment Tribunal “emergency”, in advance of the anticipated influx of claims created by the Employment Rights Act 2025.

For employers and HR professionals, these figures highlight an ongoing challenge: employment disputes are entering the system faster than they are being resolved. This backlog can mean longer wait times for hearings, extended uncertainty for both employers and employees, and increased legal costs for those involved in disputes.

Moreover, there is little point in the government bringing in the worker protection promised by the Employment Rights Act to great fanfare, if the levers by which to enforce it are broken.

So what is the Government Doing to Address this? - Introduction of the FWA

The government is attempting to address some of these pressures through a significant shift in how employment rights are monitored and enforced, with the formation of the Fair Work Agency on 7 April. The Agency is an administrative executive agency of the Department for Business and Trade, rather than an independent regulator like the HSE.  It will “bring together existing enforcement functions namely the Employment Agency Standards Inspectorate (EASI), the Gangmasters and Labour Abuse Authority (GLAA), National Minimum Wage and the Office for the Director of Labour Market Enforcement (ODLME) to create a strong, recognisable single brand so individuals know where to go for help. It will also lead to a more effective use of resources.”[i]

The Government has stated that the FWA will be “cracking down on those employers failing to pay the minimum wage” and “using new powers to ensure the estimated 900,000 people who have holiday pay withheld each year finally receive it”.

“Our Fair Work Agency will be a game-changer in ensuring rights are properly enforced, whilst backing those businesses that already do the right thing”[ii]

Crucially, the FWA represents a shift away from a system that relies heavily on individuals bringing retrospective Tribunal claims. Instead, the agency will monitor compliance and take enforcement action directly, and in doing so, the hope is that this will reduce the number of disputes that reach the Employment Tribunal in the first place. 

While the agency’s enforcement policy statement has not yet been published, its anticipated powers and responsibilities already signal a much more proactive regulatory environment.

The Agency will have the power to inspect workplaces without an employee complaint, demand employment records on the spot and enforce statutory record keeping requirements.  It will also be able to bring tribunal claims on behalf of workers.

Key Changes Employers Should Be Aware Of

The Fair Work Agency will introduce several significant changes to the enforcement landscape:

• Consolidation of Enforcement Powers: the FWA will bring together several existing bodies with responsibility for enforcing several key employment rights, including: National Minimum Wage compliance, agency worker protections, gangmaster licensing. This consolidation is intended to create a more coordinated enforcement approach.

• Investigative and Enforcement Powers: the FWA will have significant powers to investigate and enforce suspected breaches of employment rights (SSP, holiday pay, or NMW) and issue civil penalties – up to 200% (maximum of £20,000 per affected employee). The penalties are payable within 28 days of the notice of underpayment being issued, and discounted by 50% if paid within 14 days.

• Recovery of Enforcement Costs: the agency may have the power to recover its enforcement costs from non-compliant employers, adding another potential financial exposure.

• Public exposure of Non-Compliant Employers: employers found to have underpaid workers may also face public exposure, which could have reputational consequences.

• Criminal Offences: The new framework will also introduce criminal liability where employers:

  • Knowingly or recklessly produce false documents or information;

  • Intentionally obstruct enforcement action; and

  • Fail to comply with enforcement requirements without reasonable excuse.

Importantly, employers should be aware that the agency will be able to investigate breaches that occurred up to six years previously.

Practical Steps Employers Should Take Now

With the new enforcement regime approaching, employers should consider taking practical steps to ensure compliance:

1. Ensure contracts and handbooks are up to date and check that they comply with s.1 ERA 1996, reflect any amended terms, with working time opts outs if appropriate, plus evidence of right to work checks.

2. Check the accuracy of pay and holiday calculations: employers should ensure that payroll calculations are accurate and regularly reviewed, particularly where pay structures are complex.

3. Maintain comprehensive records: from April 2026, employers will need to retain records demonstrating compliance with pay and leave obligations for at least six years, in line with the FWA’s look-back enforcement powers.

4. Develop strategies for handling potential breaches: having a clear internal process for identifying and resolving potential compliance issues early can help reduce financial exposure and reputational risk.

Conclusion

The Employment Rights Act 2025 represents a fundamental rebalancing in employment laws in favour of the worker.  However, the current state of the ET system will mean those rights will be toothless without investment into enforcement.  The creation of the Fair Work Agency represents a much needed and significant shift in enforcement away from individual litigation and towards regulator-led oversight.

However, it still remains to be seen whether it will be given the necessary funding and the “teeth” to provide the levels of inspection and enforcement which would significantly reduce the burden on the Employment Tribunal.  

And whilst we await the policy statement with interest, this is only part of the story. The ET system still needs significant investment so that it is properly equipped to hear claims- claims which are becoming more complex and time consuming as legislation and the needs of society evolve.  With the case backlog continuing to grow, it will not be a quick fix - but hopefully one in the right direction. 

Ellie Rogers is a Senior Associate at Constantine Law

[i] 04/03/2026 An introduction to the Fair Work Agency - GLAA

[ii] Business Secretary Peter Kyle