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Equality is under the spotlight – So why is the number of tribunals increasing?

Employee tribunals – the elephant in the room for many businesses

While diversity and equality have been at the top of boardroom agendas for some time now – it appears that a culture change has yet to be experienced by the masses.

Over the past 13 months, there has been an increase in employee tribunal applications; between April 2014 – March 2015, there were 61,305 applications and this figure rose to 83,031 between April 2015 – March 2016

The introduction of the £1,200 fee to submit a tribunal claim in 2013 caused the number of applications to quickly drop by 60%, leaving them at an all-time low.

The fees quickly came under scrutiny from individuals, unions and solicitors up and down the country – blasting them as a barrier to justice and a roadblock to employees being able to effectively complain about infringements on their employment rights.

The rise could also be down to the spotlight that has been shone on equal pay over the past 24 months since the gender pay gap reporting notion was proposed and passed.

Perhaps it comes as no surprise that equal pay is one of the most common reasons for tribunal claims and there have been a number of particularly high-profile cases to highlight the ongoing issue, such as the £100 million equal pay case brought against Asda in 2016.

Such inequality and discrimination claims can be potentially devastating for a business; the age-old adage ‘bad news travels fast’ is particularly relevant here, and the damage to a brand’s reputation can sometimes prove irreparable, particularly for small local businesses when a community turns its back.

The financial blow is also likely to be shattering; the highest sum that has been award in a sex discrimination claim was £1,762,130, while the maximum amount awarded last year for a disability claim was £257,127, race discrimination £43,735 while age discrimination was far less at £16,263.

The average amount awarded for unfair dismissal claims has increased from £1,500 to £13,851, although the highest amount awarded for this type of claim was just shy of £500,000.

It’s not just the cost associated with a claimant winning that a business must shoulder; defence costs coupled with the cost of time lost and the detrimental impact on productivity means that the average cost of a claim to a business is £20,000, or £8,000 if a claimant loses.

However, as previously touched upon, it’s not uncommon for members of the press to be present at tribunal hearings as they are public – this could mean the business incurs reoccurring costs if the case is reported in the media.

Worryingly, in a recent survey that we conducted, it’s apparent that many business owners simply don’t possess the in-depth knowledge of HR and employment law to protect themselves from tribunal claims.

For instance, 46% of business owners believe that after making a member of staff redundant, they can rehire for the same role, and 23% of businesses are unaware that employee data can only be accessed by authorised personnel – leaving themselves open to tribunal claims.

So what are the ways that businesses can protect themselves from a costly and damaging tribunal? Below are some of the most effective ways that businesses can ensure they are acting within the law and taking a comprehensive approach to employment law and a proactive method to protecting their brand and bottom line.

Documentation of Employment

In our survey results, we uncovered the fact that 32% of businesses were not aware that they were legally required to give employees a written statement of terms within eight weeks of their employment commencing.

These contracts should be concise and comprehensive, detailing policies, expectations and business procedures. You should provide each employee with two copies – one for them to keep and one to be signed and handed back to you to be kept with your employment records.

By signing the copy, the employee is agreeing to the terms and conditions laid out within the document, this reduces the chance for disputes to arise.

By failing to provide the employee with the document within the eight-week period, the business can be ordered to pay the employee compensation of between 2-4 weeks’ pay.

It’s important that this document is water-tight and it’s worth seeking the help of a HR professional – commonly, disputes arise when policies or clauses have not been included in the contract or are worded in a way that makes them open to individual interpretation.

Employee Issues and Grievances

It’s not uncommon for employees to raise issues or concerns with their line managers, and if these issues are dealt with quickly and in a way that leaves both parties happy with the outcome, or at least with a greater understanding of the situation, the issue is laid to rest.

However, in many cases, those members of staff in senior positions lack the confidence or knowledge to deal with employee concerns.

It’s the lack of progress or length of time for a resolution to be reached that leads to further conflict, and the relatively small issues that remain unaddressed often fester until they turn into a costly tribunal.

It’s not down to the manager to deem the grievance irrelevant and ignore it, if it has been raised informally or formally, it is an early indication of an issue.

Documenting each grievance will provide evidence that it has been acknowledged and resolved by the employer, it also provides the employee with the opportunity to voice concerns about the resolution should they not be happy.

There needs to be a cultural shift to ensure that employees feel comfortable and confident in raising concerns; those in senior positions must not look upon grievances as just another task to deal with, but as an opportunity to demonstrate respect and understanding and explore the grievance as an opportunity to make positive changes.

It’s business-critical that employers ensure that their managerial staff are provided with the right training and knowledge that enables them to deal with employee concerns effectively, whether they are related to conduct, performance or absence.

In many cases, businesses choose to outsource this element of HR to ensure that it is dealt with meticulously, so that they can guarantee that they are not left vulnerable to tribunal claims.

Following Procedure

The ins and outs of employment law can prove difficult to develop an in-depth understanding of, and when faced with the demand for knowledge, it pays off to seek professional advice.

Many employers are not aware that, in many cases, they are entitled to take action against employees that have proven challenging to manage, but because they haven’t correctly followed procedure, they find themselves being hit with an unfair dismissal claim.

If you are honest, in the day to day running’s of a business, gaining an understanding of employment law isn’t high on the agenda, but the business should have a set procedure when it comes to managing, disciplining or dismissing staff that is meticulous, fair and transparent to prevent unfair dismissal claims from being made against you.

Of course, sometimes there will be cases where a claim will have to be seen through; discontented employees will make a tribunal application even in cases where you have acted within the realms of employment law. The introduction of application fees has deterred those making false or weak claims, but they still exist.

Permitted that a fair and respectful procedure has been followed and documented, you will have an arguable defence. Having a professional present throughout the process is best practice, as they will be able to effectively address the questions that are asked during the hearing and ensure that the correct documentation is present.

Each tribunal case is judged individually and if the claim is deemed to be false, the employee could be ordered to pay the court costs – but this will not guarantee that a business will not suffer the effects of wasted preparation time as well as reputational damage.

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