Employment tribunal fees were introduced by the UK Government in 2013 with the intention of cutting the number of malicious and weak cases. However, trade union Unison challenged the fees, saying they prevented workers accessing justice and in July 2017 they were abolished following a Supreme Court ruling, as reported here.
It is no surprise to see that the number of UK employment tribunal claims has risen considerably as a result of this U-turn, as reported in the Ministry of Justice's (MoJ) latest quarterly statistics (published here in September). Single claims received at Employment tribunal more than doubled in the quarter ending June 2018, compared to the same quarter in 2017.
As well as a possible spike in new claims, employers also face a high number of applications from individuals who were previously prevented from bringing a claim because they could not afford the fee, and/or claims that were previously struck out due to non-payment of the fee.
An increase in claims against employers could therefore continue for the foreseeable future, so businesses should ensure that they follow good employment practice, and have comprehensive policies and procedures in place to mitigate the risk of employment claims being made.
These developments indicate it could also be a good time to consider (or revisit) the subject and merits of Employment Practice Liability Insurance (EPL).
EPL insurance provides coverage to employers against claims made by employees alleging the like of wrongful termination, harassment and other employment-related issues, such as failure to promote or discrimination (for instance, based on age, sex, race or disability).
In addition to paying claims, EPL insurance provides the policyholder with legal advice in relation to possible claims. This can help organisations manage and respond to incidents more confidently at the pre and post-claim stage.
We recommend all employers protect themselves against the inevitable rise in claims and EPL coverage is available as a stand-alone product or, more commonly, as an optional extension under Directors & Officers (D & O) Liability insurance.
If you would like to know more please get in touch with us here.