How to Reduce Employment Tribunal Costs With HR Software

Employment tribunals are incredibly stressful for both employers and employees and they’re on the rise.

Since the beginning of COVID-19, employment tribunals rose by 13.42% (translating to 1,353 more tribunals in 2020/21 in comparison to 2019/2020) (Wright Hassall).

According to The British Chamber of Commerce, employers are faced with an average cost of £8,500 when they have to defend themselves against an employment tribunal claim.

However, even if the employer wins a case, the legal costs are rarely recovered.

With Employment Tribunals on the rise, it's important for businesses to do all they can to protect themselves. In this article, you’ll find out exactly what a Tribunal is and how to prevent them in the future.

What is an Employment Tribunal?

Employment Tribunals deal with claims employees have bought against employers. Independent judicial bodies work to resolve these disputes between both parties.

Common reasons for Employment Tribunals

There are many reasons why an employee may have a dispute with an employer and take it to a Tribunal. These include:

●       Redundancy pay

●       Equal pay

●       Unfair dismissal

●       Breach of contract

●       Unauthorised deduction of wages

●       Working hours

●       Discrimination or harassment

How to avoid Employment Tribunals

The best way to deal with an employment tribunal is to introduce processes in order to avoid them in the first place.

The most effective way to mitigate the risk of a Tribunal is to ensure all processes and procedures are thoroughly documented.

Employers should also ensure they’re following regulations when it comes to properly storing Payroll and HR data.

This can be done by:

●       Having clearly written procedures and policies in place

●       Ensuring each employee has a written statement of their terms and conditions of employment (this is in fact a legal requirement)

●       Ensuring employees are paid properly and fairly

●       Outsourcing payroll to avoid any payroll mistakes

●       Properly track employees time and attendance with reputable Time and Attendance software

●       Ensure all documentation, disciplinary processes and policies are all properly stored and managed through HR software

However, HR and finance teams are under a lot of pressure and don’t always have the resources available.

For example, a study by ACAS revealed that 70% of businesses didn’t have any procedures or records in place to document any informal meetings that had taken place.

When HR and finance teams rely on several different documents, spreadsheets, software and processes, mistakes are made which increases the risk of a Tribunal.

When a judge looks at an Employment Tribunal, they’ll look for evidence that the correct processes and procedures have been undertaken and if the employee in question was fairly treated.

The benefits of HR software

When organisations implement HR software such as Payescape’s HRescape, they’re creating a culture of consistency and compliance, which protects themselves and their employees against any grievances.

HRescape can help with the following:

●       Ensure consistent and compliant processes are put into place.

●       Remove the risk of any pitfalls in a process, reducing the likelihood of mistakes.

●       Create a digital audit and trail of compliance and evidence.

●       Standardised communications across the business.

●       Enhanced reporting and analysis making it easier to spot any trends or future issues and prevent them.

Implementing HR software, Time and Attendance software can also help should they find themselves faced with an Employment Tribunal. Request a demo today.