Employment Tribunal Claims – A Quick Guide for Employers
Employment Tribunal Fees
Employment tribunal claims have increased significantly since the fees were abolished in July 2017. Single employment tribunal claims have increased by 130% and, during 2018, multiple claims increased by a whopping 344% compared to the same period in 2017.
Have we got your attention?
We are not writing this blog to scare you into signing up for our HR Retained service. However, please keep reading to identify the key benefits to your business.
The first indication employers may have of a potential Employment Tribunal claim against the company is contact from ACAS. For a claim to be heard in the employment tribunal, a certificate has to be issued by ACAS. The Employment Tribunals Act 1996 requires prescribed information to be provided to ACAS by a prospective Claimant in order to receive the all-important Early Conciliation Certificate and, as such, commence Employment Tribunal proceedings. Whilst this is a hurdle to jump ahead of an Employment Tribunal claim, it’s not particularly high, as there is no requirement for the prospective Claimant to actually enter into Early Conciliation. Early Conciliation may be the opportunity for employers to gain more information to the Claimant’s intentions and the basis of their potential claim. Furthermore, it can help an employer determine whether it wishes to settle the claim out of the Employment Tribunal or proceed to fight the claim.
Just because a prospective Claimant contacts ACAS, this doesn’t guarantee they will pursue a claim. We have experienced many prospective claims that come to the end of their journey at this stage. Former employees ‘test the water’ so to speak; they know they have little or no merit to their claim and count on the ‘fear factor’ of the employer to offer them a settlement.
Ask yourself: If you had contact from an ACAS Early Conciliation Officer, would you know what questions to ask? Would you be able to assess the situation and make an informed decision going forward?
Consider: If your managers have been dealing with an employee who is no longer in the business, are you confident that you could successfully defend an Employment Tribunal Claim? Do you know the quality of the procedures they have managed, prior to the employee leaving the business? Can you provide a robust audit trail to help defend the claim?
View this stage of a potential Employment Tribunal claim as the starting point to gather your evidence to defend the claim (if you haven’t done so already). Gather information from those employees involved, take statements, cross check information, ensure you have dates, times, places, supporting evidence – and remember, employees may leave, so this is essential if a claim takes a long time to hear.
Time Limits – Responding to an ET1 Form
It’s essential that any key employee likely to be named as the contact by the Claimant is aware of the deadline to respond to an ET1 form within 28 days. Identify your key employees; it may be managers, supervisors, directors or payroll, and ensure they know the steps required should they receive an ET1 form. It’s highly unlikely that the Employment Tribunal will allow you to defend the Employment Tribunal claim against you, if you miss the deadline. Check whether email and voicemail accounts are assessible when key employees are away from the business. The response should be on the prescribed ET3 form and this should contain all of the information requested.
Time Limits – Employees Making a Claim
Generally, most claims are to be submitted to the Employment Tribunal within 3 months. Here’s a quick guide to the most common claims:
3 Months – Discrimination (discrimination, harassment & victimisation), contract, unfair dismissal, collective redundancy, failure to consult – TUPE and working time
6 Months – Equal pay
Therefore, don’t assume ‘out of sight, out of mind’.
Some Employment Tribunal claims are taking up to 18 months to be heard and that timeframe is increasing.
The maximum amount of a week’s pay for the purpose of calculating the basic award for unfair dismissal and a redundancy payment is £525 and equates to a maximum of £15,750; this became effective on 6th April 2019.
The maximum compensatory award for unfair dismissal is £86,444, or a year’s pay, if less than this figure. Claimants will have to demonstrate their loss and evidence their attempts to secure employment.
In 2017/18, the average award for unfair dismissal was £15,007 and the highest was £415,227.
Note that there is no limit for a successful claim of discrimination. Disability discrimination had the highest average award in 2017/18 of £30,698.
Our Advice for Employers
- Check you have Employment Tribunal Cover – this may be with your HR provider, a trade association, or your own insurance policy, and ensure you know the full requirements, as the provider may find any excuse not to pay out.
- Review the ability of your managers or those that deal with employee issues – ask yourself, “how confident am I that we can defend an Employment Tribunal claim following the management of this employee”?
- Do you have a robust audit trail of procedures involving employees?
- Does your GDPR records allow for data retention to cover the delay in Employment Tribunal Claims? Consider employee records, letters, emails, witness statements and correspondence.
- When did you last review your own internal procedures such as disciplinary, grievance and appeal? Are they efficient and likely to serve you well?
- How consistent is the management of your employees in your business? Is one manager more lenient than another? Do your managers know about discrimination and the risks of treating employees less favourably?
- It may be worth using a commercial approach, if you do find yourself having to defend an Employment Tribunal Claim. Will it cost you more to defend than a potential award? It’s not just the financial side – it’s about the time involved, the stress and worry of potential witnesses, and the time that key employees will be out of the business. You may need your entire management team present at the Employment Tribunal for one or more days.
In our view it’s all about being sensible and managing your employees in a proactive and commercially focused manner. If you haven’t felt the need for a Retained HR Service before, then now may be the time to do so.
If you don’t have a HR Manager, then why not consider our HR Retained Service? You will have access to a dedicated HR Professional, who will build great working relationships with your business, complementing your culture to achieve enhanced employee engagement.
Your business will benefit from reduced costs and, most importantly of all, you will minimise your risk of an Employment Tribunal Claim. For more information, please call Jude Read-HR Consultancy on 01455 231982 or send an enquiry via our contact page.