Employment tribunal system failing SMEs

Employment tribunals are unfair and unsatisfactory according to a survey from the Federation of Small Businesses (FSB).

The survey, of over a thousand FSB members, showed a quarter labelling the employment tribunal system unfair, while 39% were unsatisfied with the process. Furthermore, almost half of small businesses opted to settle out of court rather than entrench themselves in the increasingly complex and expensive system.

With 26 different employment acts and no less than 80 types of complaint that a staff member can bring against their employer, it is unsurprising that small firms are losing faith in the tribunal system, particularly with a fifth of cases involving more than one type of claim.

This all leads to small firms spending valuable cash, in legal fees, and management time, a sacrifice compounded further by the fact that, even if they win the case, they have a less than one in ten chance of recouping legal costs.

FSB Employment Affairs Chairman, Alan Tyrell commented, “Tribunals are no longer the quick and relatively straightforward methods of solving work place disputes they once were. The huge volume and complexity of legislation means that most employers seek legal advice before attending a tribunal and so face increased costs. For many small employers these costs have become prohibitively expensive.”

As if these results were not bad enough news, employment lawyers Associa Employment Services warned that compensation payments for unfair dismissal are set to rise.

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