The number of cases is reported to have risen by 32% during the last financial year while the maximum amount of compensation that can be recovered is now 51,700. The need to prepare detailed witness statements for exchange before tribunal hearings usually imposes a greater burden on employers rather than employees. Increased legal regulation also means more time spent with the lawyers.
So executive time and money is being taken up by issues which many employers may view as ancillary when running a business.
It is not surprising therefore that employers may be more likely to settle claims if at all possible. However, not all cases can be resolved that easily. There is now a greater awareness of employment tribunal procedures and former employees who feel they have a grievance will have seen the publicity given to large settlement awards and be more inclined to push on to a hearing, regardless of the merits of their cases.
So what can be done about this unsatisfactory state of affairs? Get it right in the first place is the obvious advice but that is not always easy particularly given the rate at which employment regulation has increased in recent years.
The Government has taken action which could ease the burden on employers. It announced that tribunals will have new power to strike out cases which have no real chance of success. Previously, tribunals could issue warnings about costs and require deposits from applicants.
However, it remains to be seen how tribunals will exercise their new power to dismiss cases at a time when litigants are becoming aware of the right to a fair trial under the European Convention of Human Rights, which was incorporated into UK law following the Human Rights Act 1998.
The power to demand a deposit from an applicant has been little used to date. The maximum amount will be 500, and the effect of this procedure will depend upon the extent to which tribunals are prepared to use it.
But what about the recovery of costs in tribunals? For a start legal aid is not available for an employment tribunal claim in England and Wales. However, a tribunal can only award costs where the behaviour of a party has been frivolous, vexatious or otherwise unreasonable. The ceiling for such an award is to be increased to 10,000 and the behaviour of any representative will be taken into account when considering the question of costs. Again, the Human Rights Act 1998 may be relevant as will the approach the particular tribunal takes.
There has, however, recently been a review of tribunals, including employment ones, and a number of recommendations about procedure are expected to be made. Responsibility for funding may be moved from direct governmental control, again because of concern about the right to a fair trial under Article 6 of the European Convention. The problem of delays will also be addressed. Stricter timetables and the allocation of cases in proportion to the sums at stake is likely.
Whether these changes will make life easier for those using tribunals is debatable. Already the Human Rights Act has spawned increased litigation from which employment tribunals are not exempt.
The Arbitration Alternative Scheme run by ACAS may be an option worth considering. The scheme offers confidentiality, a potentially lawyer-free zone and a more flexible approach to deciding the question of whether there has been an unfair dismissal.
However, even the ACAS alternative has had to fall into line with the Human Rights Act. The parties involved in the matter must waive their rights under the Act before opting for the scheme which, in any event, is fairly limited in scope. It does not apply, for example, to the more expensive discrimination claims or claims involving European law.
It is clear that new tribunal procedures will only make a difference if they are used and seen to be effective. Otherwise, tribunal claims will continue to be another contingency that has to be included on the balance sheet.
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Janet Gaymer is head of employment law at Simmons & Simmons