You might think that employee relations issues are the preserve of the big companies, but they are just as likely to affect start-ups and emerging companies too. After all, the size of the employing organisation is often not relevant to an employment tribunal.
One of the biggest dangers is ignoring an employee relations dispute and hoping it will go away. It rarely does. Acas (the Advisory, Conciliation and Arbitration Service for the UK) received almost 115,000 requests for employment tribunal related conciliation support during 2020/21, of which 30% related to unfair dismissal, along with more than 700,000 calls to its helpline.
Employee relations compensation awards can be high
As at 6 April 2022:
- The limit on the amount of compensation that can be awarded in unfair dismissal cases is (the lower of) a year’s salary or £93,878.
- In addition, the automatic basic award for unfair dismissal, which is calculated in the same way as statutory redundancy, can be up to £17,130.
- Compensation for discrimination cases (sex, age, religion or belief, disability, gender reassignment, being married or in a civil partnership, being pregnant or on maternity leave, race (including colour, nationality, ethnic or national origin) and age is uncapped. Similarly, there is no upper limit for successful H&S or Whistleblowing complaints.
But awards for damages can be higher!
- In 2021, a manager found to have been the victim of unfair dismissal, disability-related harassment and unfavourable treatment for something arising in consequence of disability was awarded more than £2.5m.
- In 2022, a City banker was awarded over £2m for sex discrimination, victimisation and unequal pay.
- In 2019/20, the latest figures available, sexual orientation discrimination awards averaged £28,000.
Although £2m+ awards are exceptional, whether a case is won or lost there is always a consequence – the cost of instructing legal representation alone can run to tens of £000’s, with costs rarely being awarded, while reputational damage (internal as well as external) can be substantial.
Take employee concerns seriously to minimise your exposure
Dealing with an employee relations issue that can escalate into a potential claim is disruptive, expensive and also stressful for all involved, but applying simple good practice steps will help mitigate the risk. These could include:
- Making sure you have signed, comprehensive contracts of employment in place for everyone.
- Being clear on your rules and expected standards, for example in the use of IT, attendance and conduct.
- Visibly championing a culture of equalityity, fairness and zero tolerance for any form of discriminatory treatment, from the top.
- Giving employees a risk-free route to raise concerns, this way you can address them before they become complaints (as you would prefer customers to do!).
- Regularly and comprehensively training all workers in understanding diversity. (Record that you have done this.)
- Separately training your managers so that they understand their higher responsibility to treat people fairly.
- If a problem arises, investigating it, not ignoring it. Be sure to follow your own processes and, as a minimum, the ACAS Code of Practice on Discipline and Grievance.
- Keeping contemporaneous notes of actions taken.
- Managing performance continually against known criteria and giving timely, honest feedback on problems as well as achievements.
- Ensuring you have access to professional HR advice, whether internal or external.
Mitigate the risks with good employment practices
While you can’t stop employees exercising their right to bring a claim, good employment practices can make it less likely they feel the need to do so and therefore reduce the associated legal, time and reputation costs that would inevitably follow, while also increasing the likelihood that you would be able to successfully defend a claim if it did happen.
If you need support putting in place good people practices or advice on an employment-related concern, contact iPeopleHR at kay@ipeoplehr.co.uk and have a look at our Resolve People Problems on our services page.
