The government has released the latest set of Tribunal statistics for the period October to December 2018 – and they make for stark reading for entrepreneurs. It’s been more than 18 months since Tribunal fees were abolished, but there is still no sign of the number of claims slowing down. Naturally, you will want to adopt proper defences to reduce your risk – but where do you start? Often, the most effective means of prevention is for you and your team to go back to basics.
E2E’s strategic partner, Ellis Whittam, discuss what this uncertainty means for employers, and the steps you can take to protect your organisation.
What do the statistics reveal?
Well, the number of single-claim receipts is up by 23% from 7,957 in October to December 2017 to 9,811 in October to December 2018. We cannot therefore blame the scrapping of fees for this rather significant increase, as we’re comparing periods year on year when it was free to start proceedings.
Comparison to prior years is instructive. Fees were introduced in 2013, and in the period October to December 2012, nearly 14,000 single claims were lodged. That means, potentially, claims could still rise by another 70% if we’re headed back to pre-fee levels, which is a worrying prospect for HR departments.
A lengthier process
Adding to the anxiety, it’s not just the number of claims received that are making HR professionals sweat, but also the length of time they are taking to resolve. The mean age for a claim when it finished in 2018 was 30 weeks, which is four weeks longer than for the same period in 2017. The amount of management time involved in dealing with claims is often lost behind the actual financial cost, but it is significant.
Going back to basics
Faced with such uncertainty, there are a number of steps businesses can take to try and guard against the current claims culture. In our experience, the risk of being involved in a claim be reduced by 20% simply by implementing the following preventative measures:
1. Have robust policies and procedures and follow them. It sounds simple, but it’s worth remembering that the origin of many claims is usually rooted in a disagreement. That could be between colleagues in the form of a grievance or an accusation of misconduct leading to disciplinary action. If the procedure applied in dealing with those situations is defective, that can often give grounds for a claim. As a fundamental first step, you should take the time to review your contracts and handbooks to make sure you have robust procedures for dealing with disciplinaries, grievances, performance management and sickness absence to encourage positive outcomes and prevent mistakes from being made.
2. Train your employees. It’s one thing to have policies in place, but you need to have management who are equipped to deal with issues when they arise. Investing in training tailored to the specific areas where you have identified that your organisation is most exposed to risk, or areas where there is a knowledge gap among management, can make a real difference to the outcome of difficult situations.
3. Take advice. As we all know, the intricacies of employment law can be complicated. For example, there are five different types of unfair dismissal claim, nine different protected characteristics under the Equality Act, and at least four different claims that can be brought for each. As such, it’s easy to make a mistake. Don’t go into situations blind – take the time to make sure you and your team are aware of relevant legalities and their consequences so that you don’t get caught out.
Control what you can
Despite all best efforts, whether an employee claims against you is largely out of your hands. However, in addition to the above, there are still things you can do to minimise the danger and increase your chances of success should the worst happen:
1. Insure against risk. The costs of Employment Tribunal claims can be eye-watering. In 2017/18, an average award of compensation was around £15,000, plus the costs of defending that sort of claim, which could be in the region of £8,000. Taking insurance gives you peace of mind in difficult times, knowing that your compensation and costs are covered.
2. Instruct experienced and quality litigators. If you’re not confident in dealing with Employment Tribunals, remember that there is help available. You’re also much more likely to succeed in defending claims with an expert fighting your corner. So, while you can take care of the ground work and implement preventative measures to reduce risk, it’s worth considering the value that external support from professionals may have in protecting your organisation should the worst happen.
This is a time of great uncertainty for UK businesses, and the ever-growing number of Tribunal claims only adds to the worries most companies face in the current climate. In all of this, prevention – rather than fire-fighting – is key. Of course, as an entrepreneur, dealing with day-to-day issues as they arise often takes precedence, but taking the time to review your policies and procedures now will prevent costly and time-consuming issues down the line.
If you need support, speak to Ellis Whittam’s qualified Employment Law Advisers, who will review your contracts and handbooks, provide expert-led training and offer pragmatic and commercially-savvy advice to keeps claims at bay.
 2017/18 national single claim receipts up 66% year on year. EW client claim receipts up by 46% in the same period