New research from law firm Birketts has revealed that employers are having to devote more than a month of their working time to dealing with employment tribunal claims, with most claims being settled before they even reach a hearing.
Birketts’ research of 500 HR professionals in businesses in England and Wales, the majority with more than 1000 employees, showed that respondents had devoted an average of 4.8 weeks purely on handling employment tribunal claims. In terms of the number of claims brought against them, companies in Wales fared worse, reporting, on average, almost one employment claim every fortnight (45.5 claims on average). *
While unfair dismissal claims topped the table of claims (23.9%), disability discrimination was a close second with 22% of all claims reported.
Commenting on the findings, Catherine Johnson, Partner in Birketts’ Employment Team, said:
“Employment claims have become a costly burden for businesses, financially but also in terms of the resources required to handle them. Managers too often see dealing with grievances and disciplinaries as an inconvenience and rush through an investigation, increasing the risk of a successful claim being made. This may be because managers have had insufficient prior experience and lack good quality investigations and disciplinaries training.
“With a backlog of employment claims in the courts and tribunals, and the introduction of new and strengthened workplace rights (including a ‘day one’ right to claim unfair dismissal) being a central element of the Government’s policy agenda, staying ahead of the rapidly changing employment law landscape has never been so important for businesses and their HR leaders. Failing to tackle the potential for employment claims early on is already proving costly to businesses and could get worse at a time when employers are already grappling with increased costs from the Autumn Budget.”
Birketts advises employers to implement clear workplace policies, provide quality training to line managers and maintain open lines of communications between management and employees to avoid an escalation of issues.
Last minute settlements
The study revealed that on average in the last 24 months, the majority of respondents (62%) reported settling Employment Tribunal claims before the final hearing. Almost a quarter (24%) of HR teams reported that Employment Tribunal claims were settled the day before the hearing was due to commence.
Birketts says that employers need to take an early view on whether early settlement is the most cost-effective or desirable outcome, which will also limit the time commitment and expense of preparing for a full hearing.
For further insights, read the full report here.
*Between July 2022 and July 2024 survey
