Employment Law Digest June 2026: Managing employment disputes in a backlogged system

New claims continue to outnumber disposals, while the single claim open caseload has risen to 64,000, up 55% on the same period in 2024/25. For employers, the message is clear: once a dispute escalates, resolution may be slow, costly and damaging.

Against that backdrop, employers have every reason to address workplace disputes before positions harden and litigation becomes inevitable. Early intervention can reduce legal spend, management time and operational disruption, while limiting the damage that prolonged conflict can do to employee wellbeing, working relationships and workplace culture. Put simply, a dispute handled promptly and fairly is far more likely to be resolved without the need for formal proceedings.

Mediation is one option employers should be turning to more readily. Used at the right stage, it can help parties explore practical solutions in a confidential setting, preserve working relationships where appropriate, and avoid the delay and uncertainty of tribunal litigation. Even where it does not bring matters to a close, it can narrow the issues and improve the prospects of settlement.

The quality of internal investigations matters just as much. Whether the issue concerns conduct, grievance, discrimination or whistleblowing, a superficial investigation can materially increase legal risk. That challenge is becoming more acute where grievances are generated with the assistance of AI: such documents may be polished and persuasive, but difficult to unpick if they contain sweeping allegations, formulaic language or assertions that are not clearly tied to underlying facts. In those circumstances, an early conversation with the employee may be the best way to understand what is really being alleged, what facts are said to support it, and where the investigation should properly focus. Once the issues are clear, the process itself must be prompt, even-handed and evidence-based, supported by clear terms of reference, appropriate witnesses, proper record keeping and reasoned findings. That not only supports better decision-making, but also leaves employers in a stronger position if their actions are later scrutinised in tribunal proceedings. Equally, AI-assisted grievances should not be discounted simply because of how they are drafted; the real task is to test the substance of the concerns raised and the evidence behind them.

Those points will become more important still as the unfair dismissal reforms in the Employment Rights Act 2025 approach.

From 1 January 2027, the qualifying period for ordinary unfair dismissal claims is due to fall from two years to six months, while the statutory cap on compensatory awards is due to be removed. That will bring more employees within scope at an earlier stage and increase the potential exposure where dismissals are mishandled. In that climate, early resolution, thoughtful use of mediation and rigorous internal investigations are no longer simply matters of good practice; they are essential risk-management tools for employers. Of course, early intervention and credible investigations don’t just reduce legal risk; they build trust, reinforce culture and prevent disputes from becoming corrosive.

Now is the time for employers to review and tighten processes with early intervention and resolution the key focus.

If you need advice, contact our employment team today.