Dubious compensation claims plague harassed bosses

Cracking down on rogue employers is the main focus of the Government’s employment relations policy for this Parliament. Employment law specialist Paul Brill argues that the move should be balanced by a crack down on rogue employees who plague bosses with frivolous compensation claims.

No responsible company will dispute that employees should be protected but there’s a growing tendency for some workers to play the system which is costing firms time, money and heartache.

A good example is the man who started 80 claims to employment tribunals over a period of 10 years. They were mainly to do with discrimination on the grounds of sex or disability relating to failed job applications.

He is either extremely unlucky to have come up against 80 bigoted bosses or there was something flawed in his definition of discrimination. The fact that he only won two of his cases suggests the latter may be true.

It could be argued that if he lost the other 78 cases then justice was done and employers have nothing to worry about. Unfortunately, that doesn’t tell the whole story. Every time an employee makes a claim his employer has to investigate.

That means taking senior managers away from their day jobs of actually running the company. Members of staff may have to be interviewed to establish the facts of the case. This can be disruptive and affect morale.

It adds up to a significant investment in time and money, and it leaves firms vulnerable to opportunist employees. There are even serial complainants who move from firm to firm seeking rich pickings from compensation.

Now the situation has got so bad that many firms simply cave in when faced with a claim. According to a survey by the employers’ organisation the CBI, businesses believe the tribunal system is ineffective and skewed against them.

The survey of 450 businesses revealed that many firms settle cases they have a strong chance of winning because they fear the cost of going to tribunals.

It’s easy to see a firm’s dilemma if they feel the tribunal system is more trouble than it’s worth, but if everyone simply gives in then it encourages more people to proceed with weak cases and the problem snowballs.

It’s vital that firms stand their ground and fight. It can be cheaper in the long run.

A good example of this is the case of the deputy head teacher who sought £1m compensation for bullying and intimidation after claiming she’d been forced to use a chair that made embarrassing noises every time she sat down.

Only those people who attended the hearings can have a full appreciation of the merit of the case but the rest of us can get an idea from the decision of the tribunal.

It ruled that she was neither unfairly dismissed nor discriminated against. It even blamed her for failing to get herself a new chair. Ironically, it may be the fact that she was claiming so much that led to her defeat. Had her demands been more modest her employers might have decided that it was cheaper to settle out of court.

If they had taken that decision then clearly an injustice would have been done and taxpayers’ money would have been wasted on undeserved compensation.

It need not take much to discourage people bringing unjustified claims. Five years ago the government considered introducing fees for taking cases to tribunals but backed down following pressure from unions even though the figures suggested were less than £100.

The time has come to look at this scheme again. No one wants to stop genuine claimants but time wasters must be rooted out. It would also help to see costs awarded against people bringing obviously frivolous cases. Tribunals have the power to do this but very rarely use it.

The Department of Trade and Industry says it‘s reviewing the system. Hopefully it will do so quickly. The man who made 80 claims in 10 years has now had a restriction order placed on him to stop him making any more tribunal applications.

It’s a step in the right direction but unfortunately there are many more serial complainants ready to take his place.

Paul Brill is Head of Employment Law at Andersons Solicitors in Nottingham. If you require further information on this article please contact Paul Brill on 0115 9886721 or email pbrill@andersonssolicitors.co.uk