Businesses lose weeks to tribunal claims

New research from law firm Birketts has revealed that employers are devoting more than a month of working time to handling employment tribunal claims, with most being settled before they reach a hearing.

A survey of 500 HR professionals in businesses across England and Wales, primarily those with over 1,000 employees, found that between July 2022 and July 2024, respondents spent an average of 4.8 weeks managing employment tribunal claims. Companies in Wales faced the highest number of claims, averaging nearly one every fortnight with 45.5 claims over two years.

Unfair dismissal claims accounted for 23.9% of cases, with disability discrimination claims following closely at 22%.

Catherine Johnson, Partner in Birketts’ Employment Team, said employment claims have become a costly burden for businesses not only financially but also in terms of resources. She noted that managers often see grievances and disciplinaries as an inconvenience and rush through investigations, increasing the likelihood of successful claims. She added that a lack of experience and quality training in handling investigations contributes to this issue.

“With a backlog of employment claims in the courts and tribunals, and the introduction of new and strengthened workplace rights being central to the Government’s policy agenda, staying ahead of the rapidly changing employment law landscape has never been so important for businesses and their HR leaders. Failing to tackle the potential for employment claims early on is already proving costly to businesses and could get worse at a time when employers are already grappling with increased costs from the Autumn Budget.”

Birketts advises companies to implement clear workplace policies, train managers effectively and maintain open communication with employees to prevent disputes from escalating.

Last-minute settlements common

The study found that in the past two years, 62% of HR professionals reported settling tribunal claims before the final hearing, with 24% stating settlements occurred the day before proceedings began.

Birketts suggests employers should assess early whether settling is the most cost-effective option to limit the time and expense of preparing for a full hearing.