The only things certain in this world are death, taxes and employment tribunal claims
PUBLISHED: 13:27 06 December 2013 | UPDATED: 13:27 06 December 2013
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Matthew Burton, Partner in the Employment Team at BPE Solicitors LLP, looks at the consequences of Employment Tribunal fees, and offers his top five Tribunal pitfalls.
The introduction of Employment Tribunal fees on July 29 2013 (a move that was estimated to save the tax payer £74m per year) was a bit like Marmite; people either loved or hated the idea. Opinions ranged from the Trade Unions who declared that fees would be a “roadblock to justice” and a “throwback to Victorian times”, to most businesses welcoming the change due to a belief that it would put off vexatious Claimants. However, one thing everyone had in common a few months ago was uncertainty over what level of impact the fees would have on the number of claims lodged in Tribunal.
For those waiting with bated breath (or even mild curiosity) the initial scores are now in, as the Ministry of Justice released its quarterly Employment Tribunal statistics in late October. Taking into consideration that on average, Tribunals receive 17,000 claims per month, the statistics show that, as expected, claims brought prior to the introduction of fees rose dramatically to 25,000 for the month of June and 17,000 for July. After this, following an unsurprising pattern, claims for August dropped to 7,000. This was in no doubt owing mainly to the spike of claims in the previous months.
The blip in Tribunal claims is proving to be just that, however. Early figures for September show that a total of 14,000 claims have been lodged. This does not include those claims that are still in the Tribunal system awaiting receipt of fees or a decision on whether the Claimant qualifies for a reduction in fees due to the newly introduced remission scheme. So, based on the initial figures, it looks like Tribunal claims are here to stay and fees are unlikely to put off a determined Claimant.
With the above in mind, our view is that the best approach for businesses is to accept that claims will happen (just like death and taxes unfortunately), and to deal with them robustly when they do. The good news is that on the same day that fees were introduced, so were new Tribunal rules. These rules strengthened the Tribunal’s powers to strike out unmeritorious claims at an early stage and, if used, will hopefully help employers focus on their businesses rather than litigation.
On the basis that Tribunal claims are here to stay, we have set out what, in our experience, tend to be the top five Tribunal pitfalls:
1. Incomplete Documentation
• Ensure that all relevant documents (including emails and records/notes of all meetings/conversations with employees) are retained
• Be careful what is communicated via email!
2. Failure to follow the relevant ACAS guidance or internal grievance/disciplinary procedures
• Explain any departures from “best practice”
• Regardless of the factual circumstances make sure managers follow internal procedures
• Arrange, where possible, for any appeal hearing to be led by people not involved in the initial decision
3. Failure to investigate
• Ensure that all issues and allegations raised by an employee are investigated and addressed
• Document how you conducted investigation e.g. via statements, emails or supporting evidence
• Share findings and documents collated with employee for their comment (before final decision)
• Address question of whether medical evidence or reasonable adjustments are required where health issues are raised (in all situations e.g. including disciplinary and redundancy)
4. Insufficient reasons for action or conclusions
• Consider disciplinary record and any mitigating circumstances
• Ensure that the reason for dismissal/disciplinary sanction is clear and consistent (both for the particular employee and generally)
• Ensure that managers are trained on the standard procedure and share experiences
• Ensure that managers receive practical training on what constitutes a sufficient reason for dismissal and basic employment law principles to ensure that they can spot potential issues e.g. whilstleblowing
5. Unexplained decisions or delays
• Ensure that all decisions can be justified and supported, where possible by evidence
• Schedule all meetings without unreasonable delay and explain any delay
• Consider option of suspension carefully and ensure that kept to shortest period possible
Finally, even if a Claimant does succeed with a Tribunal claim this does not apparently guarantee that they will pocket any money! Recent BIS-sponsored research suggested that over half of those awarded a Tribunal pay-out did not actually receive what they had been awarded. Just under half (49%) in the survey had been paid the award in full and a further 16% had been paid in part (meaning 35% had received nothing at all). The most common reason for non-payment was that the employer had become insolvent, but many believed that this was a smoke screen because they suspected that the company in question was trading again under a different name. Another reason was simply that the employer had refused to pay.
The Government is now considering ways to clamp down on non-payment, such as fixed penalty notices for late payment, “naming and shaming” employers who fail to pay, raising awareness of enforcement options and giving Tribunal Judges a power to order deposits from businesses where it looks like they might not cough up cash. This again means that employers would be best advised to address Tribunal claims before a Judgement is issued against them (as ignoring the problem will no doubt end up a more costly option).
Matthew Burton is a Partner in the Employment Team at BPE Solicitors LLP.
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