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Councils face the strain due to employment tribunal bill
THE cost of employment tribunal claims to the region’s cash-strapped councils is revealed today by The Northern Echo with some admitting such claims are placing an increasing strain on their budgets.
The Echo contacted several local authorities across the region to ask how much they had paid in compensation to staff over the past five financial years, whether in settlement or having been ordered to do so by a tribunal.
They were also asked for details of any legal costs incurred.
Redcar and Cleveland Council paid the highest single amount to an individual - £443,000 – in November 2009 to a woman who was dismissed for whistleblowing and brought a claim for lost earnings.
Its legal costs peaked at £292,000 in 2008/9, although this figure dropped to £48,900 in 2011/12.
The authority said it had faced a very large number of claims relating to equal pay – more than 2,000 – although all but a few had now been concluded.
It said it had a successful track record in reducing litigation and was successfully managing its financial exposure to claims, despite large scale reductions of staff as required by Government spending cuts.
North Yorkshire County Council said it had paid £294,274 in compensation to past and present employees between 2007/8 and 2011/12, although it did not break this down any further.
Its legal costs had risen over the past five years, peaking at £192,181 in 2011/12.
Council leader John Weighell said: “We are in a situation where local Government is being down sized and it is inevitable that some staff losing their jobs may not be happy with that situation.
“If they have any reason to bring a claim, it would quite clearly be something that we would be concerned about within the budget pressures we are facing.
“What we are talking about is low numbers in the context of the thousands of employees we have.
“We would always prefer to deal with employment issues without the need to go to a tribunal.”
The authority said that increases in costs from employment tribunals inevitably “impacted adversely” on its finances.
Durham County Council paid £159,632 in compensation to claimants in 2011/12, although this figure did not include equal pay litigation.
It also revealed there had been 24 employment tribunal cases involving the authority in the past three years, with a figure of between £55,000 and £60,000 being the highest paid to a single claimant.
Darlington Borough Council said it had paid £9,000 in settlement of claims to date in this financial year, along with £8,500 in 2011/12, although this did not include equal pay claims.
However its costs – this time including equal pay claims – in 2011/12 amounted to £152,516.
In 2010/11 they were £220,065.
A spokeswoman said such costs were “putting pressure on the council’s already strained budget”.
Elsewhere, Stockton Borough Council revealed that in October last year it had paid £41,758 in compensation to a 50-year-old woman awarded damages for being unfairly dismissed.
The authority’s own legal costs and those from barristers fees amounted to a further £69,545 in 2011/12.
Hartlepool Council said that it had dealt with 301 equal pay claim cases over the past five years which left the authority with a legal bill of £146,409. It gave no details of any compensation paid.
A spokesman said: “Expenditure on tribunals is kept to a minimum but on occasions we have to engage professional advice to protect the interests of the council.”
With such costs proving a burden for many employers, the Government has been attempting to streamline employment laws, including introducing upfront fees for workers wishing to pursue a claim.
However the TUC believes such changes could backfire by discouraging low paid workers with legitimate grievances from pursuing them.
Kevin Rowan, the TUC’s regional secretary, said that while there was a significant cost involved in employment tribunals they were a “hugely important part” of people’s rights at work.
He added: “At this moment in time when employers are looking to shed costs and staff there is a case for scrutinising employment rights more closely than ever.
“Quite often the threat of an employment tribunal is something that will ensure the letter of the law is followed by an employer.”
:: Middlesbrough Borough Council was unable to provide any figures in response to the Echo’s inquiry.
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