Small businesses warn on employment tribunal figures

The Federation of Small Businesses (FSB) has welcomed the 25% fall in employment tribunal applications announced today.

But it warned that the figures mask the number of employers who were settling out of court, rather than going through a costly and complex system.

Because out-of-court settlements are confidential the employment tribunal annual report does not contain information on the number of employers who settle out of court. However, FSB research in 2004 suggested it was running at 44%.

FSB employment affairs chairman, Alan Tyrell said: "Small employers face large legal bills on top of any awards they may be required to pay and are particularly frustrated that costs are only awarded against the litigant in a tiny minority of cases.

"Costs need to be awarded much more often against vexatious applicants, and should take into account the huge increase in the legal fees faced by both sides."