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The Real Cost of an Employment Tribunal Claim to Employers

Calculator, graph and pen on a desk - employment tribunal claims

Every Jersey employer who has been involved in a claim brought in the Jersey Employment and Discrimination Tribunal will be aware that, win or lose, at present, the Tribunal doesn’t have the power to award costs.

Although the Tribunal can impose an ‘indirect’ financial penalty by reducing the level of its award to take account of a variety of factors, such as the refusal of an applicant to accept a settlement offer made before the hearing which would have rendered the hearing unnecessary, the employer nevertheless has to bear its costs of the claim.

‘Hidden’ Costs of Employment Tribunal Claims

But the direct legal costs of bringing or defending a claim, which can be significant, are not the full story: they don’t take account of the ‘hidden’ costs of a Tribunal claim, and these are not purely financial.

The ‘management cost’ of co-ordinating a claim can be significant: relevant documents have to be identified and collated, which can involve a time-consuming review of email correspondence and CCTV/telephone recording records, if these are maintained by the business and relevant to the matters in issue.  This process diverts resources away from the normal operation of the business and can cause operational stress as a consequence.

Witnesses

If evidence is required from employees of the business, there is the time-cost of identifying who may be able to provide that evidence, and of interviewing them.  If the claim proceeds to a hearing, there is the cost of them appearing at it as witnesses.

Moreover, the witness interviewing process, if not handled appropriately, can bring the claim to the attention of other employees of the business, potentially provoking resentment and disharmony within the workforce as employees can frequently be unwilling to be drawn into a situation where they perceive that they are being asked to ‘tell tales’ on their fellow workers.  In a worst case scenario, this can result in those employees deciding to leave the business, or indeed provoke ‘copycat’ claims from other employees.

Conciliation

Conciliation by JACS is frequently an effective way of resolving a claim without the necessity to proceed to a hearing before the Tribunal, but even that is not a ‘cost neutral’ exercise: there is still the time-cost of preparing for and attending that conciliation.

If attempts to resolve the claim in advance of the Tribunal hearing fail, then it should not be forgotten that the hearing itself, and the judgment of the Tribunal recording its findings and decision at that hearing, is public and will be published as a legal case report.  There is, accordingly, a reputational ‘cost’ arising from the claim, particularly if the case is reported by the local media.  Even successful defence of the claim is not enough to guard against all reputational damage – there can always be a section of the public who will consider that there is ‘no smoke without fire’ and accordingly take a dim view of the business, even if the Tribunal has exonerated it of any wrongdoing.

Understanding the True Cost of an Employment Tribunal

Consider all the costs of a Jersey Tribunal claim carefully – they may be greater than you think!  You may consider it a cost-saving exercise dealing with the process without employment law advice.  However as you will note from the very long list of employers appearing in the Jersey tribunal it makes good business sense to consider taking some professional advice, it may save you a lot more than the legal costs.  If you have an employment issue contact the experts Parslows Jersey employment lawyers.

AuthorChris Austin

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