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WHY IT PAYS TO SETTLE IN THE EMPLOYMENT TRIBUNAL
by Paul Hennity , Employment Law Solicitor , Senior Associate at Aaron & Partners LLP
When an employee is dismissed , whatever the reason , the fear for the employer is they could be landed with an employment tribunal claim . Even in circumstances where the reasons for dismissal appear fair and a good process has been followed , there is nothing to stop an employee pursuing their claim .
The Tribunal is a free service and save for very exceptional circumstances the parties bear their own legal costs , meaning that even if a business successfully defends the case , they cannot recover their legal costs from the Claimant . This is often very frustrating for employers who feel they have done nothing wrong , and particularly where the Claimant ’ s claim has low prospects of success .
The current average time period for an Employment Tribunal claim from start to finish is 335 days . A great deal of energy , time and cost can be ploughed into defending claims , which ultimately distracts from running the rest of the business .
Often , the financial cost of defending the claim outweighs the value of the compensation the Claimant seeks , so it is more cost effective to reach a commercial settlement than to fight the case . Whilst commercial settlements are difficult to swallow for employers , once the emotion and frustration is removed , it makes little sense to spend more money on legal fees and still run the risk of an unfavourable decision in the Tribunal , than to settle for less and draw a line under matters .
Settlement agreements provide employers with an opportunity to settle claims before they arise , and should really be offered before a decision to terminate employment is made . Whilst there is a cost element to compromising claims at an early stage , the long term savings , both in respect of costs and time are significant . Settlement agreements also allow for the employer to place greater control on the employee , and can include confidentiality clauses , restrictions and set out the consequences should the employee breach the terms .
If claims are presented in the Tribunal , they can be settled at any time before the final hearing via ACAS . Once a claim is received by an employer , they must balance the costs of running the case against the value of the claim and their prospects of a successful defence . Even in the strongest of cases , there are no guarantees in the Tribunal and so it is always worth considering compromise , as frustrating as that may be .
For further information contact :
Paul Hennity Aaron & Partners LLP Call : 07855 163374 Email : Paul . hennity @ aaronandpartners . com wirrallife . com 35