Firms must avoid rising threat of tribunal claims

As the number of claims to employment tribunals reaches record levels, Helen Connaughton looks at how firms can avoid getting themselves into trouble when making difficult choices over staffing levels.

Sometimes in our haste to solve one problem we find ourselves creating difficulties elsewhere.

That has certainly been the case for many businesses forced to lay people off or reduce their working hours during this seemingly endless economic downturn.

The figures speak for themselves. The number of claims accepted by employment tribunals in the 12 months to April this year rose by 56%.

The huge surge was largely caused by the increasing number of multiple claims. These are where several employees bring the same claim, usually relating to issues such as equal pay.

However, there was also a 14% increase in single claims and a 17% increase in claims relating to unfair dismissal, breach of contract and redundancy issues.

The figures emphasise the need for employers to follow the correct procedures.

If you are proposing to make redundancies then you must consult staff as early as possible. This should be at least 30 days before the first redundancy if there are between 20 and 99 jobs to go and at least 90 days in advance if the number is over 100.

You must provide staff with written details about such things as the reasons for the redundancies, the number and categories of people involved and how you plan to select the employees affected.

Many firms find it useful to enter into compromise agreements with redundant staff. The agreements set out the terms and conditions relating to the termination of employment and once signed will prevent the employee bringing tribunal claims in the future, except for personal injuries or pension issues.

The firm may have to provide an enhanced redundancy package to encourage staff to sign but that could be a price worth paying to achieve a clean break and remove any fears of the employee taking legal actions in future.

Because staff will be waiving their right to bring an employment claim in the future, they must receive independent legal advice before entering into a compromise agreement to ensure they know and understand what they are signing. This advice should be provided by a 'relevant independent adviser' such as a solicitor that is experienced in employment matters and not acting for the company making the redundancies.

However, the costs are often paid for by the employer of the redundant workers as it provides an effective way of making progress and reaching a satisfactory settlement. The agreements are not restricted just to financial matters. For example, confidentiality clauses are quite standard procedures these days to prevent the employee from disclosing the terms of the agreement.

The employee may also wish to include conditions such as requesting that the employer provides a reference.

Compromise agreements are often a good way to reach a quick and fair settlement which removes the fear of employees taking legal action in the future.

Every care should be taken to avoid expensive claims. As the figures show, employees are more aware of their rights these days and more willing than ever to take legal action.

For more information please contact our employment expert Helen Connaughton on 0115 988 6726 or email hconnaughton@andersonssolicitors.co.uk

Equality takes on a more streamlined shape

Businesses will see several changes as the new Equality Act comes into effect in October 2010, although much of the legislation will remain reassuringly familiar. Laura Forster looks at the new streamlined approach to outlawing discrimination.

The Equality Act is designed to make things easier for employers by bringing together rules and regulations previously scattered throughout nine separate pieces of legislation.

The Act introduces several changes which will affect businesses and employers relating to discrimination in its various forms.

For example, businesses should be aware that people who access goods, facilities and services are protected from discrimination relating to "protected characteristics". These characteristics are:

• Disability;
• Age;
• Gender;
• Pregnancy and maternity;
• Race - including ethnic or national origins, colour and nationality;
• Religion or belief;
• Sex and sexual orientation.

The safest approach is to make it a matter of standard practice that all people are treated the same, regardless of any special characteristic they may have. Incidentally, the Act also clarifies that it is unlawful to discriminate against a woman because she is breastfeeding. It means a mother could not be asked to leave a restaurant, for example, because she needs to breastfeed her baby.

With the exception of pregnancy and maternity, people do not have to have one of the protected characteristics themselves to be protected from discrimination. The protection also applies if a person is unfairly treated because they are wrongly perceived to have a particular characteristic.

The protection also extends to people who are treated unfairly because they are associated with someone who has a protected characteristic. For example, this could apply to the carer of a disabled person.

There are also several changes relating to the workplace and employment law.

For example, work contracts must not contain secrecy clauses preventing staff from discussing how much they earn and comparing salaries to see if there is any evidence of discrimination. However, employers can still require staff not to disclose salary levels to people outside the company, particularly competitors.

There are also changes relating to harassment and victimisation, and the Act also introduces the concept of harassment by a third party. This means that employers are potentially liable for harassment of their staff by people they don't employ.

The Act updates and streamlines the law and should make things easier for businesses in the long term. In the meantime, however, companies may want to review their policies if they have not already done so to ensure they meet all the new requirements.

For more information please contact Laura Forster on 0115 988 6721 or email lforster@andersonssolicitors.co.uk