Monday, 11 April 2011

Are you prepared to take a risk?

Changes to employment tribunal rules will make the system fairer - but Shropshire employers will need to be prepared to take a risk.

That's the message from Tina Chander, a solicitor in our employment team, who warned that the suggested new guidelines were a mixture of good and bad news.

"The current rules are weighted firmly in favour of the employee and claims that have no merit are often allowed to go forward as tribunals are reluctant to strike them out early in the process. And as the cost of defending a claim can rarely be recovered, it's often cheaper for an employer to pay out rather than go ahead.

"But the proposed changes will essentially make the employment tribunal system fairer, and the aim is to reduce the number of claims and unfair charges for employers.

"It's vital though that employers go into the system with their eyes open, as they will face the risk of an extra fine if they lose their tribunal case. The penalty could range between £100 and £5000, and would be on top of the compensation they will have to pay to the employee.

"So although the new rules would restore some balance to the system, employers will have to assess whether the risk of an additional fine is worth taking."

Last year there were over 235,000 employment tribunal cases across the UK, and the proposed new rules are designed to reduce this figure - consultation on the proposals will end later this month.