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Double Whammy for Employers as Credit Crunch Drives up Number of Employment Tribunals- 08/06/2009
As the credit crunch continues to bite, Shropshire businesses are now also facing an increase in the number of employment tribunals and the subsequent additional expenditure.
Peter Collins, Associate at Shropshire law firm, FBC Manby Bowdler explained: “The credit crunch has forced many employers to make redundancies as they look to downsize and survive the downturn. Previously, most employees made redundant would accept the terms and then quickly find another job. Now, with jobs scarce, many are turning to the courts and bringing claims for all sorts of breeches of employment.
“This trend is compounded because increasing numbers of employers are trying DIY redundancy, choosing not to take advice in order to cut costs. But the procedure is complex and it’s easy to make an error, leaving them open to a claim on a technicality.
“The consequence for employers is expensive and time consuming litigation at a time when they are trying to conserve resources and concentrate on ensuring the business is well placed to survive the challenging economic circumstances.”
To balance the resources of an individual against a company, employees do not have to pay costs if they lose an employment tribunal. While making justice more accessible to employees it also means they do not have to make the assessment of risk versus reward as is the case in traditional litigation.
FBC Manby Bowdler recently represented Kaba Door Systems Limited. Employee Clare Bolton, who was the company’s human resources manager, claimed for unfair dismissal, sex discrimination, disability discrimination, protected disclosure, unlawful deduction of wages and breech of contract. While the claimant lost on every count the process was expensive for Kaba Door Systems.
Collins continued: “This case is a classic example of the problem facing employers and makes it clear why many choose to settle out of court. Kaba was vindicated on every count but had to spend a significant sum to prove this. Many employers would simply have come to a settlement, accepting some element of blame and paying a figure for compensation that would have been less than the cost of fighting the case.
“Redundancy or dismissal of any sort is not pleasant for employer or employee but if it is necessary it is important for all concerned to get the process right. This means employers should take the right advice and close the door to unnecessary claims, particularly in the face of this growing trend.”