March 4th, 2019 / Insight posted in Articles, Blog

Is your business at risk from the rise in employment tribunal claims?

Employment tribunal claims on the rise in 2018

After the Supreme Court abolished employment tribunal fees, the number of employment tribunals rose and has not yet returned to pre-fee levels. However, we saw a definite trend of increasing employment tribunal claims in 2018 and this is likely to continue in 2019 and the foreseeable future unless a new fees regime is introduced.

There are certainly strong signs that employees are increasingly prepared to bring claims since fees were abolished. Under the previous arrangements where a fee had to be paid to bring a tribunal claim, many employees would simply not make a claim if discussions with the Advisory, Conciliation and Arbitration Service were unsuccessful. This trend affects all types of claims but specifically lower-value claims, which force the parties to spend a disproportionately large amount of money defending a claim compared to the amount in dispute.

According to statistics from the Ministry of Justice, single claims increased in the most recently reported quarter (July 2018 to September 2018) by 31%, a total of 9,020 single claims.

You can find the full statistics at https://www.gov.uk/government/collections/tribunals-statistics.

How to minimise the risk of an employment tribunal claim

Employees or ex-employees can’t be prevented from pursuing claims. Even employees with less than 12 months’ service can bring certain types of claim against their employer. However, the increased risk warrants ensuring your business is protected and is in the best possible position from an HR and employment law perspective. Where businesses have no internal HR expertise, the most effective step they can take is finding good quality HR and employment advice.

Rather than react to problems when they arise, you can take action now to audit your HR processes and create an action plan to fill any gaps. For example:

  • Check that your contracts of employment and employee handbooks are up to date and issued to all your employees.
  • Could you defend an unfair dismissal case? Ensure that you have robust disciplinary and grievance procedures in place that protect your business and give you effective methods of dealing with issues of conflict when they arise.
  • Could you demonstrate clearly that the contractors and casual workers that you use are not in reality your employees or entitled to holiday pay? Ensure that they are properly identified, managed and paid, and that the contracts in place are fit for purpose.
  • Could you defend an equal pay claim? Ensure that you audit the pay rates paid to male and female employees and that equal pay rates are in place for jobs of equal worth.

Some examples of additional steps that you can take to create a more productive working environment where claims are less likely include:

  • Ensuring managers are well trained in the key HR processes and procedures;
  • Undertaking salary and benefit benchmarking to ensure that the packages are competitive and do not discriminate on gender grounds for jobs of equal worth;
  • Conducting employee engagement surveys to help identify ways your business could improve how it communicates and engages with staff to ensure that all staff feel properly rewarded and respected.

If you wish to explore how you can protect your business from the increasing risk of claims or have your current contracts and HR processes audited, please call Eric Burrow, Kingston Smith HR Consultancy, on 0208 848 5525