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Employment Tribunals. Time for reform?

Employment Tribunals. Time for reform?
Richard Rowell
Written by
Tuesday, 25 January 2011 17:30

We noted with interest this week a press release from the British Chambers of Commerce (BCC) that will strike a chord with many employers across the UK.

Some interesting facts on Employment Tribunals (ET) are

  • The average costs for an employer to defend themselves is £8,500
  • 58% of all cases are settled before the ET takes place
  • The average settlement figure is £5,400

This is a worrying trend for employers and the BCC release concluded that for many employers it is often more cost effective to settle a case, even where it is spurious, than to defend the claim.

Of those that settled the reasons were

  • 51% was to keep the costs down
  • 25% reported convenience as a major factor

Comments from Dr Adam Marshall, Director of policy for the BCC were

"The Employment Tribunal system is in dire need of reform. Currently, tribunals are too slow and overwhelmingly in favour of the employee - whereas they should be fair for employers and employees alike.

The current system is perverse - forcing businesses to settle spurious claims rather than to fight them, simply because it is more cost effective for them to do so. And those costs go beyond legal fees. The reputational impact of a tribunal can be hugely damaging to a business, particularly as they can be stretched over several months.

We urge the Government to review the current system and consider introducing a fee for claimants to discourage spurious and baseless claims. Ministers must also commit to reducing wait time for a first hearing - and making the system less of a barrier to business growth"

Richard Rowell

Richard is the CEO of Dataplan Payroll Limited and is also responsible for the ideas and development of Dataplan's innovative technology solutions such as ePaysafe.

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