01 February 2005
In recent years, there has been an abundance of new employment legislation in the UK, both from UK government and EC Directives. The increasing legislation has widened the scope of opportunity for employees to bring claims against their employers and the statistics show that many employees are making the most of it!
The latest figures from the Employment Tribunals Service (ETS) annual report for 2003-04 show that after two years of decline, there has been a 17% increase in the number of applications to the ETS. Whilst the greatest number of claims brought continues to be for unfair dismissal, which was cited in 39% of all applications, sex discrimination claims were also on the increase. The recent discrimination laws on religion or belief, and sexual orientation and the forthcoming regulations prohibiting age discrimination are likely to mean a soar in the number of discrimination claims.
The publicity given to high profile claims has also contributed to the substantial growth in the level of litigation in the employment field. Press coverage increases the awareness of individuals to their statutory rights and the potential compensation that can be achieved.
Compensation limits have increased today, 1st February 2005. The maximum amount for a week’s pay has risen from to £270 to £280. The maximum compensatory award for unfair dismissal increases from £55,000 to £56,800. The new limits will apply where the employment has terminated after 1 February. For dismissals prior to 1 February, but which are dealt with in the Tribunal after 1 February, the old statutory limits will apply.
Furthermore, the new disciplinary and grievance procedures, which came into force in October 2004, with the aim of resolving disputes outside court, allow compensation awards to increase by between 10-50% where either the employer has failed to follow the statutory procedures.
According to ETS there has been a greater number of multiple applications and claims are also becoming progressively more complex, which is leading to extended hearing times. This is adding to the cost for employers, which in the majority of cases cannot be recovered, even when a claim is successfully defended.
The ETS has also seen a number of applications related to redundancy, primarily based on the failure of the employer to adequately inform and consult. The new Information and Consultation of Employees Regulations (2004) which come into force on 6th April 2005 will place further obligations on employers to consult the workforce and could see a rise of claims in this area.
Managing risks is in integral part of any well developed business strategy, and managing the risks of employing staff must be an important element. Thankfully employment buddy has produced a fact sheet, which details the risks associated in employing staff and suggests ways in which employers can reduce these risks. Click here to view our fact sheet.