The statistics for 2009-10 Employment Tribunals (ET) and Employment Appeal Tribunals (EAT) highlighted a startling fact that the number of employment tribunals accepted rose by 56% in the year 236,000.
It also showed that the average award in unfair dismissal cases was £9,120.
The four most common claims were
- Working Time Directive
- Unauthorised deductions
- Unfair dismissal
- Breach of contract
The increase in the number of cases is undoubtedly related to the difficult economic climate but also linked poor understanding of ET process. Research by global recruitment firm ambition found that 15% of HR managers have no understanding of the process. In its survey of 200 HR managers they also found that only 5% fully understand the process.
The average cost for an employer to defend themselves regardless of outcome was £8,500 and the average settlement made of the 3/5ths being settled before going to court is £5,400.
Commenting on the research, Tim Gilbert, UK managing director of Ambition, said:
"A combination of high costs, lack of understanding and the worry over bad publicity means the majority of UK businesses decide to settle employment tribunal claims well before they end up in court. This has left UK businesses £1.6bn out of pocket, money which could have been reinvested in order to create jobs and growth in the economy. As it stands, the employment tribunal process is a dead weight around the neck of UK businesses."
