Employment Feature

Employers pick up the bill for disputes with staff

An employment tribunal could cost you and your company thousands, even if you're right! A P Robinson & Co suggest you protect your business right from the outset.

Case Study

Having been in business for 13 years without a staff dispute, Terry Moore was shocked when one of his employees made a claim for unfair dismissal. Convinced he had acted correctly, Moore, who employs 15 people at his Kent health club, decided to fight the claim at a tribunal.

After an exhausting day of legal argument, the tribunal found in favor of Moore. Despite having been found not guilty of unfair dismissal he had to pay �1,200 in legal fees and a fine for not having had a contract of employment in place.

Although the financial cost was unwelcome, the real damage the tribunal caused was the time it took. It was also a stressful process. Sitting across the room from a once-valued employee being accused of unfair treatment can be hard to take, Being cross-examined in the same way as you might in a criminal court only adds to the tension.

In this week�s Sunday Times, Andrew Stone reported on how the financial penalties alone can be painful. A typical award against you could be anything between �5,000 and �10,000, not including legal fees. If sexual or racial discrimination damages are also awarded, the fine can be higher still.

The chances of being taken to a tribunal are increasing, along with the amounts awarded to employees. In the year to March 2007 people made a record number of claims, 132,577, up from 115,039 the year before. The average award for unfair dismissal was �7,974, for sexual discrimination it was �10,052, and the average costs awarded were �2,078.

While the cost and the number of claims are rising, the complexity of employment rules is growing, according to Murray Fairclough, of Abbey Legal Protection. �As the number of laws protecting employee�s increases, so do the ways to get it wrong. That�s not a pretty picture for employers.�

Equal-pay tribunals soared from 17,268 to 44,013 last year, the largest increase by far, while sexual-discrimination claims nearly doubled, from 14,250 to 28,153.

Given the flood of new claims and new laws, it is not surprising that small firms are twice as likely as larger firms to lose in a tribunal. "A company�s problem is usually that it just does not know the law. And why should it be expected to? There are whole departments in large companies just dedicated to keeping up with all the legislation" reports Stone.

Many firms choose to settle, even when they feel they are in the right, just to avoid the angst of a tribunal. Stone said, "Even if you win, the chances are you will suffer all the costs. You very rarely get them back." "Part of the problem is staff can challenge employers without incurring any expense or fear of penalties against them if they make frivolous claims"

Claims can theoretically be made against employees who act out of spite, but in practice they hardly ever are. The financial burden falls almost without exception on the employer.

The other iniquity of the tribunal system is that the same procedure handles all kinds of cases, from wrongful dismissal to sexual and racial discrimination. It is a monolithic system that places the burden on employers to prove their innocence.

A P Robinson & Co Suggest:

If you have any concerns or queries in the area of recruitment, then please do contact Lizzy Dale here at A.P Robinson & Co, who will be more than happy to help you: 01472 345888 or lizzy.dale@aprobinson.biz

If you think you may need to dismiss someone or make him or her redundant, take advice and make sure you find out exactly what procedures you need to follow.

The Sunday Times this week reported that a lot of businesses forget that you are likely to lose at a tribunal on a procedural practicality � about 80% of hearings are lost this way.  If you failed to have the right number of meetings or letters sent or had the wrong person chairing a disciplinary meeting, you will lose.

We offer the Beprofessional package which will outline policies, management of staff and reduce any misunderstandings and the fear over Health & Safety legislation whilst ensuring businesses stay legal and staff stay safe.

Beprofessional helps employers with a whole range of issues, from advertising a job vacancy, to interviewing and accepting candidates. It will also generate contracts of employment, appraisals and forms for paternity, maternity and sick leave.

This package ensures that you have legal and employment advice on hand when a problem does arise.