Tribunal fees abolished and increasingly complex employment obligations – how can you protect your business?

08 January 2018

By Ed Stacey, PwC Legal partner

Statistics published by the government at the end of last year showed that the number of employment tribunal claims increased by a massive 64% in the two months after fees were abolished  - the highest in the UK for four years. Significantly, claims for unlawful deductions from wages (such as arrears in holiday pay), which had all but disappeared as result of fees, have resurfaced increasing from 549 in July to 2,926 in August.

This rise in claims has also coincided with the rollout of the Tribunal judgement database which made all tribunal judgements available to the public online. All the facts of any claim made against an employer are laid bare for everyone to see which can lead to reputational damage and also incentivise other employees, in similar situations, to bring further claims.

This comes at a time when the law is getting increasingly complex. Last year, the Employment Appeal Tribunal confirmed that voluntary overtime should be included when employers are calculating holiday pay (but only in certain circumstances) and that National Minimum Wage may be payable during sleepover shifts; the European Court held that employers could have to pay arrears of holiday pay all the way back to 2006; and we have seen more uncertainty arising out of cases as to whether an individual is self-employed or not.  This year we will find out whether employers who only offer statutory shared parental pay whilst offering enhanced maternity pay are discriminating on the grounds of sex and the General Data Protection Regulations will come into force in May 2018 which will change the way that employers and HR teams can collect and handle employee’s personal data, with substantial fines if the rules are breached. 

Against this backdrop, it is now more important than ever that employers keep up to date with the law and handle employee issues carefully and sensitively. Employers should make sure they have the correct policies in place, follow fair and reasonable procedures and seek advice regarding complex and potentially costly issues such as discrimination, whistleblowing and holiday pay. Further, employers now need to consider whether managers and HR teams need additional training to ensure they understand their responsibilities around contentious employee matters such as discipline and grievance, equality and diversity, performance and absence management.

Our experience is that many businesses are struggling to keep up with the myriad complexities of employment law, that they ignore employee issues and only seek advice at a late stage when a claim comes in. That is why we have a launched a new HR Support service to assist our clients to stay compliant.  Whilst previously employers could rely on tribunal fees putting off many employees from pursuing disputes, the current statistics show that this is no longer the case and the likelihood is that we will continue to see a rise in the number of claims being made. Our new HR Support service aims to equip our clients to manage their employee issues effectively and keep them out of the employment tribunal. 

Download our HR Support flyer here

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