1 in 5 companies at risk of employment tribunal
As the economy struggles on and UK businesses have to continue making more hard decisions, it seems that the employees of the UK are feeling hard done by. Between the 1st April 2011 and the 31st March 2012, 186,000 tribunal claims were made against UK employers. A further 57,737 were made between January and March 2013.
The Ministry of Justice report details that of those 186,000 claims, 31% (or 46,300) of them were for jurisdictional complaints surrounding unfair dismissal, breach of contract and redundancy. On average, each claim was bought with 1.73 jurisdictional claims within that.
Just to put it into perspective, employment tribunals took up a huge 25% of the total claims bought to tribunal in the UK during the same period, creating the figure that 1 in 5 businesses have been threatened with a tribunal in the past 3 years.
Once these claims have been made they tend to stick around too. The total value of unfair dismissal awards in 2011-12 amounted to £21.1m. With only 11% of the 46,300 unfair dismissal claims withdrawn by the claimant in 2011-12, the rest were awarded an average of £5,400 per case.
On top of settlement pay-outs, the average cost of an employer defending themselves against these claims amounted to £8,500 per claim. Interestingly, companies seem to want these claims to settle as quickly and as efficiently as possible – 3 in 5 claims are settled to avoid the high impeding costs.
These figures only go to show that tribunals give neither the claimant nor the company, what they want or truly deserve. Within 2010-11 only 8 people within the 10,000 unfair dismissal cases were reinstated back at work and claimant pay-outs were climbing so high that as of the 1st Feb 2013, the government has capped the pay-out for unfair dismissal claims to a maximum of 12 months’ pay or £74,200, (whichever is lowest) using the new Enterprise & Regulatory reform bill.
The new rules also included a new fee payable by the claimant, to prevent spurious claims, will be introduced with the intention of protecting employers. However, this will not stop employees who have a genuine claim so it is best to steer clear of all legal proceedings. Unless the UK works to reduce the huge number of employees leaving work each year due to sickness or injury (300,000 to be precise), companies will continue these huge loss in profits, productivity and reputation due to unfair dismissal tribunals.
Last week, Honeydew wrote about the cost of absence and sickness in your business before tribunals come about. When all these costs combine, the loss is something to wince at and not something to take lightly. Before your organisation goes any further, work on lowering that 1 in 5 risk of being threatened with tribunal and work with your employees to increase working relationships and create healthy patterns of absence and productivity.
Honeydew Health are offering a free absence levels diagnostic to help un-cover the scope and cost of your absence problems before tribunals become a part of the equation. Get in touch with us to claim your free diagnostic.