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How to Prevent Losing £20,000 in a Tribunal

Caroline Grifiths

Over the past 12 months we have seen an increase in the number of employee tribunal applications; to be more specific, between April 2014 – March 2015 there were 61,305 applications. Between April 2015 – March 2016 this figure rose to 83,031. Article by Caroline Grifiths, MD at Bradfield HR.

The rise could be down to the fact that tribunal claims were previously at an all-time low, having declined by 60%. This was largely down to the introduction of application costs £1200 in 2013 – the fees were blasted by solicitors across the country as being a barrier to justice and preventing employees from being able to complain about contraventions of their employment rights.

The rise could also be down to the spotlight that equal pay has found itself under for the past year via the gender pay reporting that is to be introduced. Equal pay has long been one of the most common tribunal claims, but the increased focus on the topic due to high-profile cases such as the £100m equal pay case that was brought against Asda.

The highest sum awarded in a sex discrimination claim was £1,762,130; high awards were also awarded in disability discrimination claims. The maximum amount awarded in 2015-2016 for a disability discrimination claim was £257,127, race discrimination £43,735 while age discrimination is considerably less with a maximum award of £16,263.

The average claim for unfair dismissal has increased from the previous year by £1500 to £13,851, but the highest amount that was awarded in this type of tribunal claim was a staggering £470,865. Clearly, a tribunal is an expensive ordeal for a business should the claimant win, paying the award plus the defence costs, cost of lost time and impact on productivity, methods of compromise and mediation – a tribunal will cost, on average £20,000. But even if the claimant loses – the cost of defending the business, court costs and representation remain the same, and are estimated to be around £8,000. There is also the ongoing cost of tribunals to consider; employment tribunals are public hearings, and it’s not uncommon for members of the press to be present.

There are a number of ways that these claims can be avoided, protecting your brand in the long term as well as your profits;

Employment Documentation
Legally, you must provide all employees with a written document of their contract of employment containing all relevant information within two months of them starting with the company. The contract should include concise and comprehensive details of all businesses procedures, policies and expectations – you should also obtain a signed copy by the employee.

Failing to do so means that you could be ordered to pay the employee compensation of two-four weeks pay. By having a copy of the document signed by the employee, you have already effectively reduced disputes arising – if the contract is signed, very little room is left for dispute as the employee has agreed to the policies detailed within the document.

Disputes often arise when policies or clauses are not included in the contract – be sure that the document is water tight and not open to individual interpretation.

Employee Issues Should Not Be Avoided
Often, when issues are addressed at an early stage, they can be quickly and quietly resolved. However, more frequently, those in managerial positions do not feel confident, or equipped in dealing with employee concerns – whether this is related to performance, absence or conduct.  Are you providing your managers with the right training and information to effectively deal with dispute resolution?

Issues and concerns that are not addressed early on often worsen and progress into conflict between employee and employer before developing into a costly tribunal.

Procedures Must Be Followed
Employment law can be difficult to get a grasp of – it pays off to seek professional advice, either from an employment lawyer or HR professional.

In many tribunal claims, the employer is entitled to take action against employees that have perhaps been difficult to manage, but hasn’t followed the correct procedure and find themselves hit with an unfair dismissal claim.

The process of managing, disciplining or dismissing staff should be executed with great care and meticulous planning in order to prevent unfair dismissal claims from being made against you.

Grievances Must be Dealt With
And be documented.

However small you deem the grievance to be – it should not be ignored or dismissed by management. A grievance, raised either formally or informally is an early indication of a problem. Dealing with these problems effectively will prevent a dispute developing.

This needs to be ingrained into the culture and all staff in senior positions need to be aware of their potential to prevent disputes from occurring by effectively managing these situations. The chances are, by the time senior management are aware of the issue, it’s because they have been notified of a tribunal claim.

Sometimes, You Will Have to See A Claim Through
Of course, there will be exceptional cases where disgruntled employees lodge complaints, despite you acting within the law. The introduction of the fees to lodge a claim have gone some way to dissuade these weak or false claims, but they still exist.

As long as you have followed a fair procedure and the employee has been treated with respect, it’s likely that you have an arguable defence, it is good practice to have a professional present at these tribunals, as they will be able to effectively address the question of costs. Each case is judged individually and if a tribunal has taken place due to false claims, the employee may be ordered to pay your court costs.

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