Articles
11 Essential Things Every HR Manager Should Know to Avoid an Employment Tribunal
Employment Tribunal claims are increasing steadily. Year on year the amount of cases issued by Claimants increases. Not only is there an increase in volume but an increase in the complexity of claims. This not only reflects the developing intricacy of the law itself but also the increased awareness of employees about their rights and remedies and a willingness to bring claims in a depressed job market.
This lethal cocktail of factors has the potential to cause great financial difficulties to Employers, in terms of possible compensation or settlements, legal costs and wasted senior manpower. Can anything be done by Employers to neutralize or even eliminate this risk?
The sad truth is that it is too easy for an Employee to issue Tribunal proceedings. There is no issue fee to be paid, the claim can be issued on line and there is virtually no risk of costs against an unsuccessful claimant (costs can be ordered in certain limited circumstances but after dealing with hundreds of cases I have seen less than half a dozen cases where Employees have been ordered to pay costs).
No matter how good you are as an Employer, no matter how fair and reasonable a dismissal may be, you may still have to face a Tribunal claim and there is nothing you can do to stop this - short of a binding compromise agreement.
How am I able to assert that there are 11 ways to avoid a Tribunal claim? Lest you think that I am making a false claim I will explain to you what I mean. As outlined, the way the Tribunals work, you can not stop an Employee from issuing a claim. However, there are steps you can take which will greatly minimise the chance of a claim being brought or, if a claim is brought, will greatly enhance your prospects of defeating that claim, hopefully before it even comes to a hearing.
Here I have considered 11 key issues that I have identified in my near 20 years experience of representing companies in Tribunal claims. They are points that arise again and again in Tribunal claims and even in workplace disputes that, although they may not get to a Tribunal, cause great friction, lead to misunderstandings, frustrations and even resignations.
I believe that if HR Professionals keep these steps to hand and consistently apply them, then they are bound to minimise the chances of being taken (or at least successfully taken) to a Tribunal.
1. Train Managers
Quite often an HR professional is only as good as the managers in the business. In the final analysis it is the managers on the ground who are in the frontline of HR practice. They are the ones interacting with employees, they are the ones to whom the employees are sensitive and responsive to and they are the ones who can make or break an issue before it becomes a Tribunal claim.
Most managers know to come to HR and seek advice when there is a problem. This dependence on HR can be a problem as much as it is a blessing because some managers (not all) believe that it absolves them of the responsibility to think about HR issues at the outset. An employer may have guidelines and policies but again and again businesses are let down by managers doing what they want to do, without reference to HR or without fully considering the advice of HR or relying on HR to sort it out at the end of the day. Managers can often act on their own initiative, or say something inappropriate to an employee.
It is not my intention to paint managers with a broad brush or to say that all managers are like this - but some are and that is a problem that needs to be guarded against because I have seen countless Tribunal claims which could have been prevented had the managers had a better appreciation.
Managers need to be made aware of risks through interactive HR training. Policies and documents are not enough - they are not always read or comprehended by managers. If possible, managers need to be engaged in this training, not simply lectured at. The risks need to be brought home to them. Staging a mock Tribunal claim might be a good idea, or demonstrating or even enacting some kind of case study, so the message gets home. They need to be continually re-educated, trained and brought up to date. An annual HR meeting could be held with managers to review the sort of HR problems that have arisen over the past year.
Train managers to deal with any problems that arise, following the correct procedures. In my experience most problems can be nipped in the bud if caught and identified early enough and it is usually the managers on the ground that are in the best position to identify and deal with them.
2. Draft, propagate and use policies
There is a lot to be said for setting down and codifying HR practices - not only for disciplinary and grievance procedures, but for all aspects of the business which touch on HR. A well equipped Employer will also have policies for sickness and absence, holiday procedure, redundancy selection procedures and internet usage. It is surprising the number of employers that do not have policies, or have policies that are incomplete, out of date, or do not have a policy covering some key aspect of the business. The policies need to be clear and consistent. For instance, I have often seen disputes arise where something is not clear in a policy; for example, the rate of holiday pay. Is it based on total days in the year or just working days? Another example is your list of gross misconduct offences. Make it as thorough as possible - that way you can argue an employee was aware his conduct was likely to be regarded as justification for his dismissal.
But the key is not only in having policies. What is just as important - in fact, more important - is that HR managers ensure that policies are made known to managers and staff and are read and understood by them. The broadcasting and propagation of these documents is essential - it is not infrequent to see a good set of policies drafted and then locked away, never see the light of day before some issue erupts. The Employee will then say - what policy, you did not make us aware of this policy? A Tribunal would not be impressed in this situation - it is one thing to have a policy and another thing to make it known, in other words, to make it stick and carry weight.
3. Communicate with staff and keep them informed of any changes that could affect their working practices
I am referring to minor changes that would not be the subject matter of a policy or are not necessarily contractual variations to an Employees terms and conditions. It could be a small alteration to work practices - a slight change in line management, or a change to where an employee sits or works, to his or her access to facilities, or secretarial back up. All too often such changes are made without communicating them in time to the Employee, because the changes are considered minor.
But Employees are often sensitive and eager to detect a slight in something quite minor. It is amazing how minor issues can be blown out of all proportion in the minds of some Employees. This is particularly the case in discrimination claims. Time and again I have seen discrimination claims backed up by a litany of minor changes "forced" on the Employee and seen as evidence of differential or unfavourable treatment.
The essence of good employee relations is communication. If you communicate changes to Employees in advance, to a degree consult with them and take them into your confidence, then you will minimise the potential for misunderstandings on the part of Employees. The Employee will feel they have had a stake in the changes. You also give them the opportunity to make representations on these changes at the outset, facilitating dialogue, and therefore nipping any issues in the bud before they grow contentious.
4. Ensure clear and comprehensive Terms and Conditions of Employment are provided
This is a very simple and concise point and is a pure legal issue. A clear and well drafted statement of terms and conditions or contract will go a long way to reducing disputes or in helping you to defend them. The employee might not like it but they have agreed to those terms and can't subsequently duck the issue.
This is a simple legal issue - contracts, T &C's need to be clear, consistent, unambiguous and up to date. The parties will then understand what is expected of each other and the scope for dispute is decreased. Even if the Employee has failed to read or understand the contracts or T & C's, he or she is still bound by their terms. In English law a contract is sacrosanct and largely unquestionable. That is the beauty of these documents and it is why a lot of attention should be paid to drafting them carefully and making them as comprehensive as possible.
Of course, it is a legal requirement for Employees to have a written statement of the main particulars of employment, failure to comply with which can lead to an award of compensation of two to four weeks pay.
5. Have a clear, open and transparent policy on pay
Pay is often at the centre of employment disputes leading to Tribunal claims. Also, consider that differences in pay when they become known can stoke resentments and feature heavily in discrimination claims.
Equal pay claims have increased significantly over the past two years. Such claims now constitute a very significant amount of the Tribunals work. Equal Pay claims are very complex, long winded and therefore expensive. Unions are taking a very active interest in this topic during the recession. If you have a heavily unionised workforce then it is important to review pay and remuneration structures for fairness and consistency. It is also worth noting that the new Equality Act discourages pay secrecy clauses and there are penalties for Employers who discipline or dismiss Employees that have breached such clauses.
6. Never dismiss staff on the spot
I am talking about two situations here. The first is where an Employee is caught "red handed" in the commission of some misconduct. The second relates to the timing of the announcement of a decision to dismiss at the end of a disciplinary hearing.
Firstly, I never advise a summary dismissal on the spot before going through a full disciplinary procedure. Even when an employee is caught "red handed" I advise suspension followed by the usual ACAS compliant disciplinary process. Why open yourself up to a finding that a dismissal was procedurally unfair even when there were sound reasons for dismissing the employee?
Secondly, the essence of a fair dismissal is deliberation on both sides. A carefully drafted ACAS compliant disciplinary Policy is designed to ensure that the Employee understands the charges that he faces and can deliberate on his response. The Employer should grant the same courtesy to himself. Indeed, the dismissal will be far sounder if the Employer can show that he has deliberated and considered both the evidence and the penalty before making a decision. I never advise dismissal at the end of a disciplinary hearing without an adjournment of at least one hour so it at least appears that the managers have deliberated - even if, in reality, they have made up their minds during the first five minutes of the disciplinary hearing - or even before it. Having deliberated and followed the correct procedure, the Employee can then be summarily dismissed or dismissed with notice, depending on the circumstances. Hasty decisions no matter how justified almost inevitably lead to Tribunal claims.
This also relates back to the first point about training managers as they are the ones that often act hastily in both types of situation.
7. Unless dealing with a major disciplinary breach, always follow the normal procedure of three warnings
The law considers that employees ought to be given a fair chance to improve their inadequacies before being dismissed for them. The tried and tested formula approved by the courts as evidence of this is the three warnings - oral, first written and final written. It is surprising the number of times in which this procedure is not followed. Some employers will act thoroughly in steps one and two, issue a first and a second warning and then lose patience and dismiss without issuing a third warning.
Tribunals see this three step procedure as being fundamentally fair and correct. They expect Employers to observe it. For the sake of one additional warning, Employers should not rush to dismiss before a third warning has been issued, as the consequence will be a dismissal that will almost certainly be procedurally unfair.
8. When dismissing for incapacity or long term sickness, act on medical advice
I cannot stress the importance of this. Long term sickness absence is one of the most challenging issues to deal with. More claims arise from long term sickness absence than from anything else. They place enormous stress on both the resources and the patience of employers. Claims frequently arise because Employers act hastily, fail to give the Employee adequate time to return to work (how long is adequate depends on the size and resources of the Employer), or fail to take steps to protect the Company in the event that the illness is a disability under the disability provisions of the Equality Act.
Before dismissing an Employee for long term sickness absence, take the advice of an Occupational Health Specialist or a Specialist in the illness suffered by the Employee. By taking time to consider medical reports and acting on that advice you will give yourself maximum protection. Do not rush to dismiss someone without obtaining at least two medical reports first. Also, consider that many long term sicknesses are most likely to be covered by the disability provisions of the Equality Act or, if they are not, the Employee will almost certainly believe that it is a disability and expect his Employer to have acted accordingly. If you are unsure whether or not the DDA applies, act as if it does apply. This means that you should consider reasonable adjustments to facilitate the employees return to work.
9. Guard your Words
This relates to the first point about training managers. But that was a general point whereas this is a specific one which arises frequently enough to justify separate emphasis. Wherever Employees are dealt with, not only in a disciplinary process, Managers and HR personnel need to choose their words carefully. Indeed it is not only Employees whom this applies to - it would also apply to job applicants who are rejected. It applies to the wording of recruitment advertisements, internal documents and communications, emails, oral communications as well as to the precise formulation of words used when dismissing an employee. The correct use of language is absolutely fundamental. Many Tribunal claims arise as a consequence of the clumsy and inappropriate use of language.
10. Consult a solicitor - the earlier the better
Perhaps this final point is self serving. But there is also a serious side to this point. The law is complex and as solicitors we have seen a lot of it, in action, down the years. We have a Tribunal focused perspective on how the law is interpreted - indeed, the majority of Employment Tribunal Judges were solicitors specialising in employment law before taking up their appointments. It is worthwhile cultivating a strong relationship with Employment Law solicitor, then you will always have someone who will understand your business and be able to provide you with sound and unbiased advice.
11. Be fair and consistent in your dealings with staff
The essence of employment law is fairness and the essence of fairness is consistency. If you follow the above tips and have good policies which are consistently applied across the board, then you will have acted fairly and given yourself maximum protection against successful Tribunal claims. That's all there is to it.
For more information on the above or for advice on any other employment issue please contact our employment department on 020 7354 3000 or e-mail employment@colmancoyle.com
Authors Profile: David Malamatenios
Published: Notes accompnaying presentation on the same topic at the CIPD Exhibition, Manchester 9-11 November 2010
Date: November 2010