£51,750 or Nothing - which would you prefer??

Author:Mr Guy Hollebon
Profession:Bevans Solicitors

Employment Tribunal proceedings are again under the spotlight with the recent release of two consultation papers dealing with the spiralling rise in the number of Employment Tribunal claims - the Lord Chancellor's Department paper following on from The Leggatt Report into tribunal functions generally and the DTI paper Route to Resolution.

The findings contained in the DTI paper in particular should concern employers and small businesses. According to the Workplace Employee Relations Survey 1999, which the DTI paper quotes, over half of Employment Tribunal claims are brought against businesses with under 24 employees. Added to this, the DTI report found that in the year 2000/2001 the number of new Employment Tribunal claims rose above 120,000 for the first time.

Note: The fast growth in 1994/95 and 1995/96 include the multiple applications received following the ruling in the Vroege and Fisscher case, and can be considered a one-off effect.

Source: ETS management information.

These are worrying statistics for any small employer, as they are precisely the businesses who can ill afford the costs of such claims. Indeed the DTI reports that on average it takes 16 hours of management time to deal with an Employment Tribunal claim and 1,866 of legal costs, even if the claim settles before a final hearing. It is worth noting that the legal costs figure is based on 1996/97 figures and in the same way that the number of Employment Tribunal applications has risen steadily, so too have lawyers fees.

The DTI and the Lord Chancellor's department have suggested ways to reduce the number of Employment Tribunal claims. These suggestions include the introduction of fees to be paid by Applicants before commencing proceedings; widening the situations in which Applicants will have to pay the employer's legal costs if the employer is successful in defending the application; increasing the use of Alternative Dispute Resolution and conciliation through ACAS and achieving greater uniformity in Tribunal's decisions.

Only time will tell if these suggestions are ever implemented and whether they prove to be ultimately successful in reducing the number of Employment Tribunal claims. What is clear, is that they will not stop the most determined of employees from bringing claims.

Employers must now take a forward thinking and proactive approach in order to reduce the likelihood of an employee making a claim against them.

This should start at the commencement of...

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