Focus on ...Compensation

Recent tribunal statistics demonstrate the shocking amounts of compensation awarded in discrimination claims. The statistics reveal a 56% increase in accepted claims, obviously a cause for concern for businesses. Interestingly, compensation awards for Disability Discrimination claims are highest, resulting in an average award of £52,087!

Empire HR has drawn up a list of average compensation awards for each type of discrimination:

TYPE OF DISCRIMINATION	AVERAGE AWARD	BIGGEST AWARD
Disability	£52,087	£729,347
Sexual Orientation	£20,384	£163,725
Sex Discrimination	£19,449	£422,366
Race Discrimination	£18,584	£374,922
Age Discrimination	£10,931	£48,710
Religious Discrimination	£4,886	£9,500

When considering these figures it's important to bear in mind that a very high percentage of claims are actually settled before it gets to the tribunal stage. The figures also fail to take into account the legal fees incurred by businesses in defending the claims.

Too fat to drive?

A bus company in Lancashire has suspended two drivers because of their weight. They have been ordered to lose 7lbs in a month and then new targets will be set. The company claims the decision is justified on the grounds of health and safety but it has been criticised by some local politicians who point out that driving a bus is a sedentary role.

Tribunal Case Horror Stories - Trick or Treat?

Over the past year, tribunal cases have more than doubled in the UK, with the economic downturn being blamed on the unprecedented rise.

Steve Cook, Chief Executive of Empire HR based in Aberdeen discusses this with the Press & Journal.

In this article you will see some case studies that are more of a trick than a treat to employers!

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Anticipated surge in discrimination claims

With The Equality Act coming into effect as of 1st October collating and replacing most existing discrimination legislation, the Act is likely to result in a surge of tribunal claims in the next few months. With the increase in protected characteristics from six to nine plus the introduction of protection from perceptive and associative discrimination it seems likely that employers are increasingly likely to be faced with a tribunal claim.

This is particularly worrying because the Tribunal Service has already reported a sharp increase in the number of claims placed, even before the introduction of the Act.

It is more important than ever to ensure policies covering equal opportunities and discrimination are up to date and to provide adequate training to managers on how to recognise and deal with potential issues before the escalate.

Richard Prentis, employment law consultant at Empire HR has been advising clients to be more alert than ever to the risk of a claim "The Equality Act obviously exposes employers to a greater risk of a claim because more people than ever will be protected by discrimination legislation. However, it is possibly to mitigate risks. Provided expert advice is sought, you should be well placed to defend such a claim".

Empire HR can provide support and assistance with managing employees who are protected by the Act. In the event that an employee does place a claim, the Empire HR Advocacy Unit can defend the claim and provide representation at tribunal.

Proposal to Increase Unfair Dismissal Qualifying Period to two years

At the moment the Government is actively considering an increase in the qualifying period for unfair dismissal from one year to two years.

The timetable for decision is yet to be announced and it is very likely that there will be a consultation period (about this and other employment law issues) first.


If the change in the qualifying period occurs, it will be moderately good news for employers but bad news for employees. In theory this would mean that employers would have an extra year to dismiss an employee unreasonably. But the employer could still face allegations of discrimenation or unfair dismissal claims where no qualifying period is required. This would include things such as whistle blowing and certain health & safety, maternity and trade union related dismissals. With these claims tending to be more expensive to defend than 'ordinary' unfair dismissal claims, it is unclear whether employers will find this proposal an entirely favourable change.

Equality Act Reminder

The Equality Act 2010 came into effect at the beginning of this month.

The Act collates and changes several areas of discrimination legislation covering race, sex, disability, sexual orientation, religion or belief, or age. The Act adopts a more consistent approach to discrimination – resulting in several key changes.

Some key changes that have come into effect as of 1st October 2010 are:

• Levelling up protection for people discriminated against because they are perceived to have, or are associated with someone who has, a protected characteristic, so providing new protection for people like carers
• Clearer protection for breastfeeding mothers
• Introducing a new concept of “discrimination arising from disability”
• Extending protection from 3rd party harassment to all protected characteristics
• Making it more difficult for disabled people to be unfairly screened out when applying for jobs, by restricting the circumstances in which employers can ask job applicants questions about disability or health
• Making pay secrecy clauses unenforceable
• Introducing new powers for employment tribunals to make recommendations which benefit the wider workforce
• Harmonising provisions allowing voluntary positive action

This list is not exhaustive but it does cover the area’s most likely to affect Empire HR clients. The Empire HR Bulletin has already addressed some of these changes. The July Bulletin explained how the Equality Act affects disability discrimination and the April Bulletin outlined the impact upon medical questionnaires. This edition focuses on secrecy clauses (see below). Empire HR will be keeping clients up to date on the implementation of the Equality Act. Don’t forget to check the Empire HR Facebook page or the Empire Wire for the latest information!

Britain's Got Talent tribunal

A contestant on the show has failed in her attempt to place a claim at a tribunal. The contestant alleged that she was discriminated on the grounds of her disability, leading to Simon Cowell criticising her performance and a decision not to put her through to the next round. Her claim was rejected on the grounds that Simon Cowell was not (and never would have been) her employer.

Empire HR’s advice for businesses – do not follow Abercrombie & Fitch’s example!

Famous retailer Abercrombie & Fitch has sparked outrage in Aberdeen, after placing a controversial job advert outside its store.

The latest job advert stating “We are looking for cool and good looking people to represent our brands” has caused outrage and upset in the North East. 

The posting of the advert in Aberdeen’s Union Square has led to a local MSP calling for the advert to be removed, and has shocked the local community.

A spokesman for the Company has been quick to point out that the advert is not illegal, and does not breach any employment laws.

Empire HR recently highlighted that Abercrombie & Fitch was forced to defend a claim of Disability Discrimination last year, after an employee who had a prosthetic limb was kept off the shop floor as a result of the Companies 42 page ‘Look Policy’. 

However, the Company has rigorously defended its ‘Look Policy’, pointing out that they also have anti discrimination and harassment policies, as well as a diverse workforce.

Empire HR, a leading employment law and HR company has been quick to warn their clients against following the example of Abercrombie & Fitch. 

Steve Cook, CEO of Empire HR explains that “whilst the job advert is not actually illegal, it could lead to problems if a job applicant can prove that they didn’t get the job due to discrimination.  Of course, there is no legislation specifically preventing discrimination on the grounds of looks, but there is a risk that it could lead to a claim on the grounds of disability, age, or even sex discrimination”.

Mr Cook goes on to point out that “the danger is that a rejected older job applicant could claim that ‘cool’ infers ‘young’ and that they were turned down because they were too old.  Or a rejected disabled applicant may claim that ‘good looking’ means ‘physically perfect’ and that they didn’t get the job because they are disabled.”

This job advert does raise interesting points – the store clearly thrives on presenting an image of ‘coolness’ and their website features impossibly good looking men and women.  Those approached for job interviews in the recently opened Union Square centre have confirmed that good looking people were singled out, and they were not asked any questions relating to retail experience and skills.

So is it reasonable for a clothing retailer to simply recruit those who most closely reflect the image they want to present?  Businesses often spend large sums of money building up a brand and image, which are designed to target the type of customers they want to attract.  The shop assistants in a clothing shop will obviously be part of this image, so is it understandable that they should look a certain way?

However, perhaps Abercrombie has taken this a step too far?  Does the Company really need to have ‘model like’ shop assistants to sell its products?  Do we want to live in a society whereby the best looking people get the best jobs, and those of us with are not quite to perfect are left to take the not so good jobs?

 

Or should businesses be left to decide who they recruit?  Has employment law gone too far in protecting job applicants? 

What do you think?  Let us know by posting your comments below.


Other links to previous law suits against Abercrombie and Fitch include 2005 case and the widely reported case in the UK about Riam Dean's prosthetic arm

New Year Resolution for Businesses

Empire HR is issuing this timely advice in response to the latest statistics from the Employment Tribunals Service, which reveal a 29% increase in unfair dismissal claims this year. This is obviously worrying news for businesses, which often have to find substantial sums of money to pay their disgruntled ex employees.

All employers should examine their disciplinary policies and working practices to ensure that the risk of a claim is minimised. In the current economic climate, the effects of a successful claim could be disastrous. It is also worth bearing in mind that it is not just the actual compensation that costs the business money; it is also the time and resources spent on defending the claim, which can severely affect a business.

With the maximum amount of compensation for a basic claim currently an astronomical £66,200, and discrimination claims being unlimited, it is essential that business owners and managers avoid the common pitfalls which often result in a claim.

Empire HR has the following top ten tips on avoiding a claim: 


1. Have a clear, up to date disciplinary procedure. 
This is essential. With no disciplinary procedure in place there is a strong chance that employees are not being treated fairly and consistently. The procedure will provide clear guidance to Managers conducting the disciplinary meetings. In addition, failing to use the proper procedure in accordance with the ACAS Code of Practice exposes the business to an uplift in the compensation if they lose a tribunal case.

2. Ensure that Managers know how to implement the disciplinary procedure.
All managers with responsibility for managing others should be trained in using the disciplinary procedure. Unfortunately, managers often do not realise how important it is to follow the procedure with the result that they compromise the fairness of the disciplinary sanction – ultimately risking a claim.

3. Communicate the standards expected, what types of conduct are/ are not unacceptable, and the workplace rules to employees. 

It is essential to ensure that all employees are informed of workplace rules as soon as possible and that they always have easy access to any updates. A person should not be disciplined for breaking the rules if they didn’t know about the rules in the first place.

4. Give the employee a fair hearing or a chance to explain. 

Employees should always be given an opportunity to be accompanied either by a work colleague or a trade union representative at disciplinary hearings, and be given the chance to explain any mitigating circumstances. The hearing must be as fair and unbiased as possible. After all, it is better to hear their side of the story at this stage than during a tribunal hearing!

5.Keep a record of all notices and formal warnings. 
It is important to take detailed and comprehensive minutes of all meetings. You cannot rely on warnings if there is no evidence of them! Also the outcome of the meetings must be given to the employee in writing.

6. Allow an employee the chance to improve. 

When going through a performance management process, reasonable objectives should be set within a fair timescale giving the employee the opportunity to meet the required standard.

7. Make the consequences of poor performance and/or misconduct clear to employees.
It is important that the outcome of every meeting is given to the employee in writing, stating clearly what could happen should the required improvement not occur.

8. Investigate in Full! 
There should always be a full investigation into every allegation. This becomes critical in circumstances which may lead to dismissal. A thorough investigation will often prevent the need for a disciplinary hearing, and will ensure that you are aware of the full facts before embarking on the disciplinary process.

9. Consider all the circumstances. 
All circumstances must be considered before deciding on the outcome of disciplinary action. For example, was the employee provoked or ill? A tribunal will want to know such details when determining if an employer has acted fairly and reasonably.

10. Be consistent.
It is important to ensure that every situation is dealt with in a consistent manner. If an employee can demonstrate that another person has not received the same treatment in the same circumstances, it can seriously weaken a case. It is also good practice since inconsistency can often lead to widespread discontent amongst employees.

Empire HR Ltd can assist businesses on all aspects of disciplinary action, from drafting the disciplinary procedure to representation at tribunal.