With thousands of employment tribunal claims made every month, your business may have to defend a claim at some stage.
Even though fees are no longer payable, this doesn’t mean tribunals are free.
If you want to take a shortcut when dismissing someone, or know that unlawful behaviour is taking place in your business but don’t want to manage it, you should be wary of the legal consequences.
In this guide, we explain what you’ll need to keep in mind. But you can also contact us directly for guidance with employment tribunal services.
How much does an employment tribunal cost an employer?
The British Chamber of Commerce says £8,500 is the estimated cost of employment tribunal in the UK employers will pay.
Since the removal of tribunal fees in 2017, you may make the mistake of thinking they’ll cost you no money.
After all, it’s now free for your employee to lodge a claim.
However, you should remember that submitting a tribunal claim is only the first stage in the process. It can include preliminary, liability and remedy hearings.
And that doesn’t even consider all the communication that’ll take place between the parties and their representatives.
The cost of defending employment tribunal claims starts adding up almost straight away.
After all, if you receive notice of a claim, you’ll probably seek legal advice and start preparing your defence. Looking at documents, speaking to witnesses and talking to advisors will take up significant amounts of your, and your employees’, time.
After drafting and submitting your defence, you will need to follow a timeline to prepare for the case. This will involve time spent in preparation and communicating with the other party, and the tribunal.
For example, you’ll need to gather each piece of documentary evidence and print it into a bundle. You’ll also have to send a copy over to the other party and into the employment tribunal.
When it comes to the hearings, these may last an hour up to a few days. For each witness required, they will have to attend the tribunal. Their time out of the business will cost you, sometimes thousands of pounds, where senior employees are at tribunal for a lengthy period.
While using a legally qualified representative at the hearing can be the difference between winning and losing, you will also have to pay your representative for the duration of the trial.
Also, if you have acted unreasonably or in a troublesome way, the employment tribunal may order you to pay some of the claimant’s legal costs.
Adding on remedy costs
If you lose an employment tribunal, you’ll usually have to pay a remedy that’s part of the average cost of employment tribunal to employers.
This may be money that you owed the employee, for example, where you wrongly deducted from their wages, or it could be an amount of money to compensate the employee.
How much compensation you need to pay will depend on what type of claim you lose.
For example, an unfair dismissal claim has a maximum compensatory award of £86,444 but discrimination claims have unlimited compensation.
To avoid losing a tribunal, you might decide that you want to settle the claim.
Again, you’ll have to pay the costs of any time spent negotiating and confirming a settlement, as well as pay any settlement figures.
How to avoid these costs
The easiest way to avoid employment tribunal costs is to avoid a claim. While that sounds easy, in a world of complex and ever-changing employment law and practices, it isn’t.
If you have a situation that could end up in tribunal, it’s best to take expert advice to ensure you’re following the law.
You might also consider engaging in the Early Conciliation process with Acas. That will make sure you can settle the claim before it even gets to the tribunal stage.
Looking for expert help?
Employment tribunals can be stressful and complex to manage. We can guide you through the process: 0808 198 7940.