Business

Counting the cost of workplace tribunals

IT'S right, of course, that employees should feel empowered to take on their workplace when they feel they have been mistreated.

But for employers, a recent rise in the number of cases being brought to tribunal is a major concern.

There are however, when given the right guidance, clear steps business can take to mitigate the risks and avoid a lengthy and damaging tribunal case.

A recent Irish News article put into stark reality the scale of the issue.

According to data released under the Freedom of Information Act, there was a jump by almost one third in the number of cases brought against companies in Northern Ireland last year.

In fact, 3,030 were recorded in the 12 months to March 2016 resulting in 7,144 complaints being made to the tribunal.

However, the most important statistic from a business perspective was the almost £1.5 million in total payouts to claimants by companies across Northern Ireland.

For that reason, an employer in receipt of tribunal papers can be left feeling uncertain and vulnerable.

And while the cost of tribunal claims is huge, it is not limited to financial implications.

On top of the awards to claimants, there are costs in terms of professional advice and management time, which can be considerable.

The situation is even worse for those firms that have not planned ahead and sought professional guidance.

This is perhaps understandable in Northern Ireland given the nature of the local economy, made up as it is by many smaller and often family-owned firms.

In our experience however, there are ways for employers to minimise the risk of a claim, and in doing so reduce monetary costs and any potential harm to the firm's reputation.

From the outset, it is important to ensure that all employees have appropriate contractual documentation.

Drafted well, it should provide clarity and as changes occur, it's crucial to keep relevant paperwork updated.

But having well drafted documentation is only part of the challenge. It is essential also that you follow the procedures outlined in them.

Getting the procedure wrong can result in a finding of unfair dismissal where an employee has lodged a tribunal complaint.

And issues must be addressed as they arise. Among the most common pitfalls is employers burying their heads in the sand and avoiding difficult conversations.

However, this approach ultimately leads to matters festering and all too often escalating.

Even despite the best efforts of an employer where they have followed procedure, they or their business can still find themselves facing a tribunal case.

For employers that haven't already done so, now is the time to plan for unexpected disputes, otherwise they could be left counting the cost of defending a tribunal claim.

:: Richard Willis is managing director of independent broker Willis Insurance and Risk Management (www.willisinsurance.co.uk)

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