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How much does an Employment Tribunal cost?

Since 2017, it does not cost anything to make a Tribunal claim and that has seen the number of claims increase exponentially. If a disgruntled employee wants to make a claim against you, all they need is a laptop and a spare 10 minutes. Once that claim is submitted, you are into a process which is not easy or quick to get out of. The average compensation payment in an unfair dismissal claim is around £15,000 and legal fees can often match that. More complex case types such as discrimination can cost more, with the average award for age discrimination in 2019/20 coming in at £38,794. As a result, it makes sense to have the right support in place should you need advice, as well as Legal Expenses Insurance to cover these costs.

What is discrimination in the workplace?

The Equality Act identifies nine ‘protected characteristics’: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex, and sexual orientation. It is unlawful to treat somebody less favourably based on them having one of these characteristics, because you perceive them to have one of these characteristics (even if they don’t), or due to their association with somebody who does. This is known as direct discrimination. An example would be promoting a male employee over a more qualified female candidate. Employers must also be aware of indirect discrimination – where a policy, procedure or rule which applies to everyone has the effect that people with a certain protected characteristic are put at a disadvantage to those who don’t share it. An example would be a policy requiring staff to work on Sundays, which could indirectly discriminate against people of certain religions who cannot work on this day.

How much would a discrimination claim cost me?

There is no limit on the compensation that can be awarded in a discrimination claim. The maximum amount awarded in 2019/20 was £265,719 for disability discrimination, with an average award of £27,043. The average award for age discrimination was £38,794, sexual orientation discrimination £27,936, and sex discrimination £17,420. This isn’t including legal fees and the hidden costs relating to management time, which could easily rise to 60 to 80 hours when attendance at Tribunal as a witness is factored in. With this in mind, a claim could have a significant impact on your bottom line.

At WorkNest, we help to shield employers from this cost, both proactively through robust contracts and handbooks, pragmatic advice and Legal Expenses Insurance, and reactively through specialist Litigation support throughout the claims process.

What is unfair dismissal?

It is not enough that an employer has a valid reason to dismiss; you must also be able to demonstrate that you acted reasonably in the circumstances, otherwise the dismissal may be rendered unfair. A dismissal will be considered unfair if 1) the reason for dismissal does not fall under the scope of one of the five potentially fair reasons for dismissal, 2) the employer did not follow a fair disciplinary or dismissal process, and/or 3) the decision to dismiss was outside the range of reasonable responses open to the employer. In some cases, dismissal will be automatically unfair, if for example you dismiss someone for ‘blowing the whistle’, trying to assert a statutory right, or (as is particularly relevant during coronavirus) refusing to work due to health and safety concerns. Our Employment Law specialists can guide you through the correct processes and use their experience to advise on whether or not dismissal in any particular circumstance is likely to be within the range of reasonable responses, which is the ultimate question for the Tribunal. With the added benefit of Legal Expenses Insurance, if a claim is made and you’ve taken advice, there would be no cost to your company.

What is the Good Work Plan?

The Good Work Plan, which came into force on 6 April 2020, introduced several changes to employment law intended to improve the rights of employees and workers. Three significant changes include 1) the requirement to provide a written statement of terms on or before the first day of employment (as opposed to within two months from the employee’s start date), 2) the reference period for calculating an average week’s pay for holiday purposes is now 52 weeks (rather than 12), and 3) the requirement to provide additional information within the Contract of Employment, including normal working hours, benefits and sick pay entitlement. Our Employment Law specialists can review your contractual documentation to make sure it’s fit for purpose and reflects these changes, and if not, revise your contracts or provide you with carefully crafted new ones.