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Tribunals: Is it (always) worth fighting a
tribunal claim?
Employers who end up on the wrong
end of a tribunal claim often decide to fight as "a matter of principle".
Although understandable, what factors must be carefully weighed up before going
down this route?
Principles can easily add
up
Just as employees' rights have
increased in recent years, so have your chances of
receiving a tribunal claim. If you're unlucky enough to
get one, you might feel compelled to defend it,
particularly to deter other staff from trying it
on with a similar tactic. But this might not always
be the best approach. So if faced with this
situation, what are the main areas you should
consider?
How strong is the
claim?
Firstly, you need to know whether
the employee stands any hope of winning.
Details of their allegations will be set out in
Section 5 of the claim form (ET1). This is sent out to
you once the tribunal has accepted the claim.
Go through each point carefully and see what
evidence you have to counter it. At this stage, note
down the strength of your evidence against each one,
e.g. "strong", "good" or "weak".
Counter it. For example, they might have
stated that they didn't know about a
particular policy. But if you have a copy of it with
their signature, you are in a strong position; without it your own evidence is weak.
What is the likely
compensation?
The next area to consider is the
likely level of compensation (if any) that they
could receive should they win. In reality,
compensation payouts are considerably less than the
media would have you believe. For example, the
"average" award for an unfair dismissal claim in 2009/10 was just over
£9,000. But this figure was
distorted by a few six-figure payouts. In reality, the
median is only £6,275.
Your own (legal)
costs
From there, move on to assess the
work and time involved in defending the claim,
e.g. dealing with tribunal correspondence, obtaining
witness statements and attending the
hearing.
How much? Research shows that, on average,
this costs employers £9,000. Bring in legal
representation and the figure will
be much higher. Plus, you won't be able to pass
all the work over completely, i.e. you’ll still need to spend time giving
instructions, attending hearings
etc.
Any damage to your
reputation?
Finally, think about your
reputation and whether your ability to attract staff (and
customers) could be damaged by any local or
national media attention. For example, if you
lost a claim for failing to carry out a textbook investigation, it's
hard to see how any press coverage
could be that problematic. But, if there were
suggestions that you turned a blind eye to bullying
or sexual harassment, the position could be
very different.
The pros and cons. You need to be honest when
looking at all these areas and
decide whether settling the claim might be
preferable; it could even be a lot cheaper in the
long-run than standing by your
principles.
Tip. Where an employee who is claiming
unfair dismissal secures another job,
it's taken into account by the tribunal when
deciding on compensation. It might even mean
they're not entitled to anything at all. Use
this as leverage to negotiate a settlement, i.e. the
claim isn't worth that much now (assuming your assessment of it showed there was some prospect of
success).
Study the allegations in the claim
form (ET1) and consider the strength of the evidence you have to counter them.
Assess what it could cost you to defend the case (including any solicitor's
fees), the likely compensation and any possibility of reputational harm. A negotiated
settlement may be far cheaper in the long-run.
“Tips & Advice Personnel”
14.10.10
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