THE last few years have lulled more and more businesses into thinking there is little – or no – risk of disgruntled employees lodging a claim against them at an Employment Tribunal.
The reason? The introduction of fees of up to £1,200 which individuals had to fund to pursue their cases for unfair dismissal, discrimination and other breaches of employment law. For many, it was a financial barrier they were quite simply unable to scale.
Almost overnight, the number of cases brought before a tribunal plummeted by more than 50 per cent.
But this spiralling downward trend is now being reversed after these fees were recently abolished. This follows a landmark ruling by the Supreme Court which decreed they were illegal.
According to our experience, the U-turn will trigger a surge in new claimants, who may now feel they have nothing to lose by taking their grievances to a tribunal hearing. And with it, the possibility of being awarded compensation running potentially into tens of thousands of Pounds.
Whilst this Supreme Court ruling makes it fairer to the individual in seeking justice and redress for losses incurred, it will naturally cause uncertainty for employers.
Against a backdrop of major changes in employment law, there is always going to be claims that are genuine – but the relaxation of all fees is likely to result in an upturn in cases filed against businesses that are not.
It is these cases, at best spurious and at worst vexatious, that will cause employers the greatest concern as they will find themselves embroiled in a “lose-lose” situation. This is because, in most cases, an employer would not be able to recover its costs for defending a “defendable claim”.
“This is a game-changer for business,” said Simon Bass, our Managing Partner and an employment law expert. “And the best way for savvy employers to protect themselves from this growing risk of a claim is to take preventative, proactive action.
“It’s imperative that employers make the most of the small window of opportunity that now exists to get on the front foot, ensuring their policies are up to date, and meet – and beat – best practice. Employment law can be a complex minefield and now it’s more important than ever to seek specialist advice.
“This action will enhance their reputation as a modern employer – helping to recruit and retain the best workforce talent – and equip them with a robust defence in the event a Tribunal claim is lodged.
“Regular reviews, carried out carefully and drawing upon expert advice, will make sure employers adhere to recent changes in employment law – such as the introduction of shared parental leave requirements and gender pay gap reporting.
“It also safeguards them against changes in the future – the biggest one of which looming in the corporate headlights is the major impact Brexit will have on UK employment.
“Those companies who have not recently reviewed their policies, or updated them to keep pace with the ever-changing world of employment law, could leave themselves wide open to claims and with little mitigation.”
There is also the added risk of PR and reputational damage from media coverage – many hearings are heard in public – and the recent BBC gender pay gap coverage serves as a prime example of how employment issues can hijack the news headlines.
Employers should also not underestimate the corporate distraction caused to the management of the business by fighting and defending a case in front of an independent tribunal.
To meet the needs of companies, Milners operates a comprehensive Employment Law and HR Support Service, each designed to give employers unrivalled peace of mind.
As part of the service, our team of qualified lawyers will review all existing employment contracts or create entirely new bespoke agreements.
This is particularly important given the increasing amount of unregulated employment law advice currently being marketed to small and medium businesses – a practice that is poised to grow on the back of the axing of tribunal fees.
“Unlike most HR advisors, Milners is very strictly regulated to give all our clients reassurance that they are receiving the highest standard of advice,” added Simon.
“Our product is also supported by the full indemnity protection of a market-leading insurance product, protecting you from costs and damages in the event of a claim against you.”