Spurious tribunal claims

The bane of many employers’ lives is the threat of, or actual Employment Tribunal Claims being brought against them.

Reforms have been put in place over recent years to try to reduce the number of Employment Tribunal Claims, and to a degree have been successful in this, as the recent Employment Tribunal Statistics show that claims have decreased from 236k in 2009/10, to 218k in 2010/11 and decreasing again to 186k in 2011/12.

Despite efforts to reduce claims employees are still in a strong position to bring a claim against their employer and often this is done on the basis of either trying to obtain money or to just cause a headache for the employer they are aggrieved at.

No win no fee solicitors have assisted in employees bringing Tribunal claims even on the basis of claims unlikely to be won, because it is well known that commercially it can be in an employer’s best interests to settle such claims prior to a tribunal and awarding the employee with what has become known as a “nuisance payment”.

Defending tribunal claims can be costly not only in terms of any compensation awarded but also in terms of business downtime in preparing responses, dealing with ACAS and solicitors and of course actually attending a tribunal hearing itself, the cost of a couple of managers having to attend to be witnesses may easily outweigh the cost of a nuisance payment of a few hundred pounds!.

Changes which came into effect in April 2012 should hopefully assist the number of claims reducing and also make employees and their solicitors think twice about lodging a claim which has little chance of success.

Firstly the service qualifying for being entitled to bring a claim of unfair dismissal has increased; employees who commenced employment on or after 6th April 2012 will now need two years’ service before they are eligible to bring an unfair dismissal claim, whereas previously this was only one year.

Additionally it has now been announced and confirmed that fees will be introduced from summer 2013 which claimants will have to pay when raising a tribunal complaint. It is intended that users of the tribunal system pay the fee in order to contribute to running costs, as well as encouraging potential claimants to explore alternative solutions such as mediation.

Following the consultation, the Government has confirmed it will implement a system whereby claimants pay an initial fee to issue a claim and a further fee if the claim proceeds to a hearing. Under the new system, there will be two “levels” of claims. For level one claims, the issue fee will be £160 and the hearing fee will be £230. For level two claims, the issue fee will be £250 and the hearing fee will be £950. The level will depend on the complexity of the actual tribunal claim.