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Employment tribunal cases set to soar as economy provokes redundancies

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The number of employers facing costly employment tribunals as a result of redundancies necessitated by the economic downturn is set to escalate this year, according to a UK law firm.


Corporate and commercial lawyers Dundas and Wilson made the forecast after the release of Ministry of Justice figures that showed a total of 236,100 multiple claims was received by tribunals in the year to 31 March 2010; an increase of 56% on the previous year.

There was also an increase of 14% in single claims, whose number surged to 71,000 during the same period.

Within this overall total, age discrimination claims increased by 37%, with unfair dismissal increasing by almost a tenth.

Eilidh Wiseman, head of employment at Dundas and Wilson, said she expected employers to defend an increased number of employment tribunal claims this year as a result of the economic downturn.

"As more and more people are dismissed or made redundant and face difficulties finding other work in the tough job market, they will have greater reason than ever to litigate," Wiseman said. "Another problem for employers is that claims are increasingly becoming more complex, leading to higher compensation bills. We have already seen a stark increase in whistle-blowing claims and age discrimination claims over the past year and this trend is set to continue in 2011."

She added that the introduction of the Equality Act last year was also likely to create further claims, as employees become more aware of their rights.

The firm’s predictions came as the Trade Union Congress warned that a proposed increase to two years in the minimum period of employment required to qualify for an unfair dismissal claim would further enable employers to dismiss staff members without justification.

The TUC’s general secretary, Brendan Barber, said: "While employer groups complain that tribunals are costing them too much, they seem to have lost sight of the fact that if firms treated their staff as they are meant to, few would ever find themselves taken to court.

"Instead of a focus on the employment tribunal process, ministers' time would be better spent looking at why so many companies, especially small employers, have such poor employment practices," Barber added.

According to the Financial Times, the Government is also planning to institute a fee for those wishing to register an unfair dismissal claim; probably at the high end of the £30–500 range discussed by employment groups.

At present, the upper limit for compensation for successful unfair dismissal claims is £65,300, although there is no cap for other types of cases, such as age discrimination.

Whistle-blowing claims also rose 10% last year.