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.

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.

Death threat results in tribunal

An employer who allegedly said “I will kill you before you get a penny of redundancy from me” has been forced to pay £13,138 to the employee who subsequently won a constructive dismissal claim. The employee initially accepted an offer to have his job back after requesting redundancy pay, but was given a ‘pointless’ job instead of his old job back.

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.

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.