Dealing with Employment Law Claims

What to do when faced with an Employment Law claim (such as an LRC, EAT, Equality Tribunal or Labour Court hearing) is a difficult situation for employers and there are a number of factors to take into account. In order to make sure that you make the right decision in each situation it is important to understand what the different influences are on employers that will affect your consideration.

If you are being accused personally of acting unfairly or being discriminatory the natural impulse is to want to clear your name. This will colour your judgment and make it harder for you to assess the situation objectively. People find it hard to accept that they were wrong so it is harder to look at the case dispassionately when you have been personally involved.

The question for one of the employment litigation forums is whether you appear to have acted reasonably based on the evidence before them. This is not quite the same as acting reasonably and it is that distinction which can cause most of the confusion. This is where it can be an advantage to have the matter looked at by someone wholly unconnected. As an individual you will often not be aware of the minor assumptions you have made that can sway your perceptions so that a decision is not as objective as you believed.

As a company, when deciding whether to settle or fight an employment claim, you have to weigh up the costs and consequences of each option. There are no guarantees at tribunal so there is always the chance that you will lose. They are also public hearings so there is the potential for adverse publicity. 

There are costs involved in a hearing irrespective of the outcome. Not only are there the costs of any representation but there is the basic cost of time and stress for you and any of your witnesses involved in the proceedings. It may cost you more to successfully defend the case than it would cost you to settle it.

There are, however, counter considerations. If an employer decides to settle cases on a costs saving basis, even when the claims are weak, employees may believe it is economical for them to find a no win, no fee solicitor who will assist them purely with the intention of getting an economic settlement so settling could encourage future claims.

Ultimately, it is a balancing act between the value to the organisation of resolving the case quickly and the benefits of defending the case. Employers should never have a blanket policy that you will either always settle or fight claims but you should instead be pragmatic. Look at each case on its merits. How important is it to you as an organisation that you fight this claim and what are your chances of success? Try to keep commercial settlements to low amounts to discourage speculative litigation.