Member Article

Azure Consulting reveals tribunals payout fall

Azure Consulting research reveals fall in South East employment tribunal payouts

Employment tribunal payouts in the South East have fallen by 29 per cent since new fees were introduced, according to research carried out by leadership development specialists Azure Consulting.

While damages for issues such as unfair dismissal and sexual or racial discrimination cost businesses in the South East £4.2m during 2013/14, this figure fell to £2.95m during the 2014/15 financial year.

The South East saw a fall above the 21 per cent national average reduction in overall payouts. However, that figure is skewed by the North East where payouts fell by 60 per cent.

The percentage of claims brought by women in the South East has fallen to 29% for 2014/15 compared to 33% for the previous 12 months.

The most expensive year for South East businesses was 2012/13 when payouts reached a total of £7.9%. Since 2005/06, firms in the South East have paid out £44m in employment tribunal compensation.

Nationally, over the past decade, £242m has been paid in employment tribunal compensation.

Sue Alderson, director of Azure Consulting said: “New rules designed to cut the number of tribunals being brought have had a huge impact. From July 2013, anyone who wants to bring a case to tribunal has had to pay a set of fees, which has led many to think twice.

“But tribunal decisions are still costing employers across the South East dear and many cases could be avoided if firms invested in training and leadership skills.

“The relationship between manager and employee is often critical in tribunal claims as people tend to leave bosses rather than workplaces. Employees may feel relations soured so much they had no choice but to leave while managers may believe they were ill equipped to deal with difficult situations.

“Businesses need to make sure that anyone who manages others is given the right tools to do so through training and support to develop leadership skills and qualities. Firms should also be doing everything they can to improve employee engagement.

“Just because numbers of tribunals and the sums involved in payouts have fallen, that does not necessarily mean that staff across the region are now perfectly happy in their jobs. If businesses set aside the time and budget to provide the right training, they may save in the long run by improving staff retention while avoiding having to fight expensive employment tribunal claims.”

The Ministry of Justice is currently conducting a review into the impact of tribunal fees, which is expected to be published later this year.

Tribunal payouts in £ by region for 2014/14 and 2013/14, including percentage change

2014/15 2013/14 Percentage Change

London 4,404,011.21 5,296,206.28 -17%

Midlands 2,528,691.58 2,273,930.04 +11%

North East 1,575,089.71 4,014,669.52 - 60%

North West 2,276,818.62 2,744,080.92 - 17%

South East (exc London) 2,954,025.13 4,198,218.26 - 29%

South West 1,362,751.93 1,698,260.40 - 20 %

Wales 948,564.18 744,864.67 + 27%

Scotland 1,394,489.51 1,160,302.20 + 20%

UK 15,174,441.87 22,130,532.29 - 31%

Sue Alderson is a director of Azure Consulting, a specialist in leadership development.

This was posted in Bdaily's Members' News section by Liz Hands .