Costly Employment Tribunals on the Rise
The most recent employment tribunal statistic has revealed that the period up to March 2016 from the previous year saw tribunal applications reach 83,031, an increase of almost 25,000 from the period between 2014 to 2015.
However, since the introduction of employment tribunal fees in 2013 (an initial £250 fee when submitting a discrimination claim and an additional £950 if the claim reaches a hearing), applications have dropped by nearly 70%. Before the fee introduction, claims were at a high of 191,451 from 2012 to 2013.
When the fees were introduced some employers argued that the fees could reduce the costs that they as a business incurred when defending vexatious claims (as the government intended), while unions were concerned that the affordability to make such claims could be a barrier to those who seek justice.
Yet, with the average cost of a tribunal to an SME estimated to be in the region of £20,000 – avoiding a costly, and brand damaging, tribunal is something which many businesses are of course keen to evade.
But at what cost to their employees?
If the barrier to entry is too high for employees to bring about claims of wrongdoing, then poorly treated employees are losing their right to justice. And regardless of cost implication, employers are likely to face a backlash from other team members who also feel wronged by such an injustice should it occur.
Despite calls for change, it was announced in March 2017 that the employment tribunal fees are here to stay – controversially, rejecting changes which were called for pregnancy and maternity discrimination claims. The government did however assign success of the Acas early conciliation scheme which aims to avoid cases reaching the tribunal stage.
The figures also highlighted that while cases are on a decrease since their high in 2013, when cases are successful the average award increased to a total of £3,386 – with the maximum award reaching over £100,000.
While employers should rightfully avoid claims which are unsubstantiated, they should do so through law abiding measures. Ensuring that business practices are legally bound, and good HR practices are in place; organisations can ensure that they are putting their employees first and avoid such proceedings.
With the workplace ever evolving due to the revolutions in technology changing how and when we work, and millennial expectations challenging previous working practices – businesses are finding that their operations often quickly become outdated as soon as polices have been bought up to date with the latest developments.
As such, it’s essential that businesses keep their HR practices up to date with their legal obligations as an employer. Leaving room for misconceptions and wrongdoing to manifest, can result in claims which could have easily been avoided.
As the legislation that employers have to deal with increases and sees new challenges arise, start-ups and small businesses often fail to invest in the HR infrastructure required to ensure that HR processes run smoothly and effectively. Leaving those businesses, in particular, vulnerable to discrepancies.
It’s also possible for claims to be made before a person is in employment with an organisation, which is something many businesses fail to realise when they are recruiting and holding interviews. For example, the questions asked at an interview should be the same to all candidates if you are examining competencies. Similarly, while many businesses now check a candidate’s social media profile before they decide to proceed to interview or hire them, companies could unknowingly view ‘protected characteristics’ – such as age, ethnicity, political views etc. – which would have been difficult to determine before, or after, an interview.
A ruling in 2016 by the European Court of Human Rights determined that employers could monitor messages sent on an employee’s personal Facebook, WhatsApp, webchat applications and emails during work hours on a work-supplied device. The particular case the ruling was made in association did have certain factors which resulted in the decision in the employer’s favour, as they had an established policy which allowed these accounts to be checked. Therefore, organisations who perhaps felt the need to act similarly, would need to ensure that they make such a policy clear to avoid acting wrongfully.
As the above example shows, where new technology and working practices are concerned, businesses should ensure they are acting with the highest level of caution and keep policies watertight. Failure to do so could result in claims which could end up in a costly tribunal, leave employees disgruntled and damage a business’ brand.
Caroline Griffiths is the Managing Director of Bradfield Group. She is a Chartered Fellow of the CIPD and also has a Masters Degree in HR.
Caroline is a very experienced HR and business consultant, founding Bradfield Consulting, initially known as Bradfield Associates, in 1989. Although Caroline's role within Bradfield is largely...