Why is it important to comply with employment laws?
Employment laws were implemented to protect employees from wrongdoing by their employers. The key employment laws include those related to discrimination, minimum wage, and protection from unfair dismissal.
The very basis of the employment relationship is the contract of employment (or written statement of terms and conditions of employment). This document covers the terms and conditions on which the employee is employed, and also details the employee’s key responsibilities to the employer.
Why is it important to give employees written terms and conditions of employment?
Currently, all employees are entitled to receive a written statement of terms and conditions of employment within two months of starting work. Employees who do not receive this can receive compensation of up to four weeks pay. This is set to change from next year. From April 2020, both workers and employees must receive a written statement of terms and conditions of employment from their first day of employment.
In addition to this, terms and conditions of employment protect the employer in many circumstances, for example, post-termination restrictions prevent ex-employees from poaching staff, soliciting customers and breaching confidentiality.
Employers should ensure that they update their processes so new employees receive a written statement of terms and conditions of employment (or contract of employment) prior to starting with the Company, or on their first day of employment at the latest.
Where an employer does not comply with employment legislation, an employee may pursue a claim in an employment tribunal. Employment tribunals were established in 1964 (they were initially called industrial tribunals). Employment tribunals are an independent judicial body established to resolve disputes between employers and employees over employment rights. Defending a tribunal claim can be costly in terms of both time and money for employers, even where they are successful in doing so.
Employment tribunal claims
Employment tribunal fees were introduced in 2013, and then abolished four years later in July 2017 when the Supreme Court abolished them on the basis that they were unlawful. Since the abolition of tribunal fees, the number of tribunal claims has increased dramatically.
In the year 1 April 2015 to 31 March 2016 a total of 83,015 employment tribunal applications were received. This increased to 88,461 in 2016/2017. In the year 1 April 2017 to 31 March 2018 a total of 109,685 employment tribunal applications were received, a huge increase of 21,224 (24%). It is expected that the number of tribunal claims will continue to increase.
Annual figures for 2018/2019 have not been released at the time of publication, however for the period from January to March 2019, the number of single claim receipts has increased by 6% to 9,500, when compared to the same period last year. From January to March 2019 19,000 multiple claims were received, up 13% on the same period last year. 678 multiple claim cases were received in this quarter, compared to 591 in the same period last year. These statistics confirm the continuing trend in an increasing number of employment tribunal claims being made.
The employment tribunal disposed of 11,000 claims during the period January to March 2019, up 4% on the same period last year. This was due to a 16% decrease in multiple claim disposals, being offset by a 22% increase in single claim disposals. During this period, 26% of disposals were ACAS (Advisory, Conciliation and Arbitration Service) conciliated settlements, 22% were withdrawn and 11% were struck out and 11% were successful at hearing. The most common complaint disposed of between January and March 2019 related to unauthorised deductions, this was the same as in January to March 2019.
Alongside the increase in claims, the employment tribunal has also seen an increase in claimants not represented by a solicitor. In 2016/2017 86% of claimants were represented by a solicitor. In 2017/2018 this fell to 74%. We await the publication of annual figures for 2018/2019.
Employment tribunal awards
Interestingly, in 2017/2018 fewer tribunal awards were made, despite the increased number of claims, suggesting that employment tribunals are hearing an increasing number of less significant cases now claimants no longer need to pay a fee to submit a claim. In addition, the highest award made was lower for each type of claim reported.
- Tribunals made awards in 536 unfair dismissal claims and 136 discrimination claims in 2017/2018, compared with 587 and 158 in 2016/2017
- The highest average award was for claims of disability discrimination (£30,968)
- The lowest average award was for religious discrimination (£5,074)
- The average award for unfair dismissal was £15,007 and the median award was £8,015
- The highest award made in an employment tribunal in 2017/2018 was £415,227 in an unfair dismissal claim, this was followed by £242,130 in a disability discrimination claim
- The number of cost awards made by employment tribunals remained static from 2016/2017 to 2017/2018 at 479. However, 310 cost awards were made to respondents and only 169 to claimants, reversing the previous trend of more cost awards being made to claimants
Ongoing employment tribunal cases
There were 586,985 employment tribunal cases outstanding at the end of December 2018, up 11% from the previous year. This is driven by the increase in employment tribunal claims lodged since the abolishment of fees in July 2017.
We will update this article when the 2018/2019 annual figures are released. You may find our Employment Law Figures download useful
If you would like further information or advice, or would like support with your written statement of terms and conditions of employment, please contact us at email@example.com