ONS data, released last night, shows that from 1 April 2011 to 31 March 2012, 186,300 tribunal claims were logged by the Ministry of Justice. And these are just the claims that make it onto the official records. With many employers choosing to settle early rather than fight a claim at tribunal level, the number of actual disputes almost triples.
'In many cases employers simply pay troublesome employees to 'go away' through early settlements,' explains Dan Peyton, an employment law partner at McGuireWoods. 'Employees know this and many use it to get undeserved compensation for concocted grievances.'
These so-called 'nuisance' claims are a thorn in the side of UK employers. Because of the costs associated with fighting a claim, it is generally cheaper for a business to pay-off an employees than defend itself at a tribunal, even if it is a nuisance claim and the employer stands a good chance of winning. 'The basis of the tribunal costs regime is that normally each party bears its own legal costs whether they win or lose,' says Peyton.
'This number of nuisance claims to extort money from businesses isn’t included in the statistics, but lawyers deal with far more settlements than Tribunals,' he concludes. 'On this basis, even a conservative estimate suggests UK employers in reality face over 500,000 employment disputes each year.'