Beat the boss

Do some employees bring spurious employment tribunal claims against their (ex)employer? Will the new Equality Act lead to an increase in claims? Many employers would say so: Duncan Bannatyne has certainly said so, twice in national newspaper columns (much to the disgust of the legal Twitterarti). Indeed, he takes the view that the Equality Act will 'damage honest employers' and is giving him a 'sense of humour failure'. Is he right or is this merely headline-grabbing posturing?

And he's not alone. The British Chamber of Commerce published its report Employment Regulation: Up to the Job? in March this year and stated, in more measured tones, 'employment law is now weighted too far in favour of the employee' and 'the result is the UK, and the EU, are becoming increasingly uncompetitive due to the rising cost of labour'.

Do some employees start meritless claims with the intention of forcing the employer to settle on 'economic' grounds, rather than fighting all the way to a final hearing and incurring substantial legal costs? In the employment tribunal there is no cost-shifting regime, unless one party is adjudged to have acted unreasonably, so that is certainly a strategy that can be employed.

Furthermore, it costs nothing to issue an ET1. Undoubtedly some claimants do bring spurious claims, although how many is very difficult to say. There are also serial litigants out there abusing the system, but no one seems able to say how big the problem is.

Ups and downs

According to the ET's own statistics, in the year 31 March 2009 to 1 April 2010 the overall number of accepted claims by ETs was up, substantially, by 56 per cent on the previous year. However, that is explained by a large number of multiple claims under the Working Time Directive brought against airlines and claims for unlawful deduction from wages, and because of 'the changing economic climate'.

Breach of contract, unfair dismissal and redundancy claims were up by 17 per cent on the previous year. However, sex discrimination cases were significantly down from previous years (18,200 in 2009-10 compared with 18,600 2008-09 and 26,900 in 2007-08).

Of those 18,200 cases, a massive 57 per cent of sex discrimination claims were withdrawn, leaving only two per cent of claims making it over the finishing line: that's 340 out of 17,500.

Looking at other 'jurisdictions', as the ET calls them, only ten per cent of claimants with unfair dismissal cases were successful at the final hearing and only one per cent of equal pay claims were won by the employee. Across the board a rather paltry 13 per cent of claimants were successful; whereas 32 per cent were withdrawn, presumably for lack of merit.

A big step

This appears to suggest that employers are correct; that they are being forced to devote time and money to defeat cases brought against them. But maybe the answer is more subtle. These figures do not tell us about the employees that decided to suffer in silence or who walked away without raising a fuss. The cases with merit may well get settled before proceedings are issued.

Deciding to sue your current, or former, employer is a big step. Walking out of a job and claiming constructive dismissal is an even bigger one because pay and benefits come to an end and the employee has to prove that the employer was in fundamental breach of contract. That's rarely an easy task, especially for someone out of work with no income. Employers often overlook this when complaining that employees hold all the aces: they don't.

Keeping quiet

The much more intriguing question, therefore, is how many employees feel wronged but, for whatever reason, take no action?

A partial answer to that last question was given in a recent survey by HR consultants Reabur recently. According to the survey, which interviewed only 1,496 women, eight per cent of women feel sexually harassed at work. Less than half of them go on to report the incidents. Of those who didn't take action, a lowly sounding 32 per cent were worried about their future career prospects and 21 per cent thought their complaints wouldn't be taken seriously by HR or management. Roughly 20 per cent said they had been subjected to sexist comments.

That's a very low sample and we're not told who conducted the survey, but, if representative of women workers in general, it doesn't suggest a tidal wave of litigious employees ready to sue at the merest bit of office banter.

But, clearly the system isn't working well. There is an ever-increasing volume of legislation and regulation that smaller employers struggle to cope with; it takes many months for cases to be listed at the ET for hearing; and the lack of a costs-shifting regime means many respondent law firms write overly aggressive letters accusing the claimant of acting unreasonably so that they can threaten a costs application, but it also means anyone can commence ET proceedings without a thought for how they might end them (which you can't do with court claims). If the claimant had to pay a stiff fee for issuing an ET1, that would wipe out the serial litigant at a stroke but prevent many impecunious but deserving employees from gaining access to justice. How would you change the system?