The Rising Tide of Tribunal Claims

The Rising Tide of Tribunal Claims – Is Your Business Prepared For The ‘Sue-nami?’

Recently published figures reveal that since the abolition of Employment Tribunal fees by the government last summer, claims to the Employment Tribunal have risen by 90 percent.

Employment Tribunal claim fees were introduced in 2013. The stated intention of the fees was to cut down on cases which would ultimately be deemed by the court to be malicious, weak or time wasting. Over a three year period since the introduction of fees, 79% fewer cases were brought before Tribunal.  However, the concern was that in reality the fees were also deterring claimants with valid claims and allowing unscrupulous employers to treat their employees badly without fear of sanction.

In July 2017, following the Supreme Court’s ruling that the fees were preventing people from accessing justice, the government was forced to abolish Employment Tribunal fees immediately and to put in place a scheme to refund fees already paid. Since the outlawing of fees, the Employment Tribunal has seen a huge increase in the number of claims being brought by employees. The latest government figures for the 2017 October-December period show there were a total of 8,173 single claims brought to tribunal, as opposed to the 4,200 in 2016 for the same period, with multiple claims rising to 31,921 in the 2017 period.

It is likely that therefore the changes have tipped the balance in favour of the employee rather than the employer in that the decision has been an improvement for those with a genuine complaint, but may also have given increase to the number of spurious claims, or claims which are designed to pressure employers into financial settlements.  Many small and medium-sized businesses can’t afford the time and money involved in handling an Employment Tribunal. They may also worry about preserving their reputation and the negative impact the news of being taken to a Tribunal might have on their business. The knock on effect has been an increase in the purchase of business indemnity insurance policies and claims on those policies.  However, with insurers often disposing of employees’ claims by settling them rather than defending them at a Hearing, the employer is then seen to be a soft target for these type of claims and their numbers mushroom.

Employers should also be aware that the Supreme Court ruling may not only open the floodgates for claims, but that the Tribunal can use its discretion to allow a claim to be brought by a claimant, even if it is out of time, should the individual’s argument be that they could not afford to bring a claim at the correct time. In other words, an employee can argue that the only reason they did not bring the claim during the prescribed period was because of the Tribunal fees – now deemed to be unlawful – that were in place at the time.

It is likely that employers and the Tribunals themselves will be keeping a close eye on the statistics and any past claims being brought. At this time it is difficult to say how many of these claims may yet be allowed.

All of these factors come together to result in a vastly increased workload for the Employment Tribunals in the last 12 months and a further concern is how the Tribunals will cope with the number of claims being made.  The problem is that Employment Tribunal staff and Hearing Days have been drastically cut since 2013. This means that there is now a backlog of new claims causing a delay in bringing claims to Hearing, and deficiencies in Tribunal administration.  It is very difficult to predict how long proceedings might take and the damage that time can cause to an employer’s case or business.

So what can a business owner do as an employer to try to stem the tide of claims? Defending a claim – even one doomed to failure – is inevitably going to cost the employer in management time and legal fees, so it is worth investing some time and money in avoiding claims as much as possible.

The most important thing is communication. Many disputes start through poor communication and the parties misunderstand each other’s desires and motives. Entrenched positions are adopted and compromise becomes difficult.

It is essential to have your contracts of employment, policies and procedures professionally written by Employment Law specialists so that they are clear and kept up to date. Problems can be avoided if everyone knows where they stand. Employees are entitled to receive the basic particulars of their employment in written form within two months of starting work and can be entitled to automatic compensation if this is not done.

Pay statements should be clear and understandable, especially with regard to issues such as minimum wage and statutory sick pay. Working time procedures and records should be clear and well-kept.

The disciplinary procedure and grievance procedure in particular, should be clear and should comply with the ACAS Code and Guidance.

Proper training for managers and HR staff is essential, so that they deal with employees properly, can identify potential problems before they become serious and thereby protect the employer’s position. Equal opportunities policies are only of use if backed up by training to give the employer a possible defence to a discrimination claim as well as to avoid discrimination (perhaps unintentional) in the first place.

Don’t duck issues or hope that they go away or will get better on their own – they rarely do.

Make sure that all meetings are documented and proper records are kept. If a claim does get as far as the Tribunal, you want to make sure that you win it – or ideally can show such a strong case that the claimant gives up. There is no substitute for a proper paper trail evidencing that all the proper procedures were followed.

There are many steps in the journey to an Employment Tribunal, and an employer who has sensible HR policies and procedures in place, and follows them, is at a lower risk of losing an Employment Tribunal claim. The vast majority of employees are reasonable people, who want to be treated reasonably by their employer. The vast majority of managers and business owners want to have happy, engaged employees.  But if the worst does happen, and a claim is made, act promptly and seek professional advice from Employment Law specialists as soon as possible.

Fitchett & Co, Employment Law Specialists, are able to offer employment law advice and support to employers who have been affected by any of these issues. Call 01483 243 587.