HR · 18 January 2016

Avoiding employment tribunals as a small business

The number of employment tribunal claims have continued to fall since the introduction of fees

Small business owners should follow common-sense criteria in order to avoid being taken to an employment tribunal by a former employee, an HR expert has said, outlining that employment law in reality is simple and straightforward to understand.

The founder of management training firm Converse Well and author of “Fire Well – How to hire staff so that they thank you”, Sue Ingram, said that small business employers limit the chance of action being taken against them if they ensure three main criteria are met.

The advice comes following last September’s announcement by the Ministry of Justice that the number of employment tribunal claims in 2015 continued to be significantly lower than before tribunal fees were introduced in 2013.

Statistics demonstrated a 38 per cent fall in claims in the second three months of 2015 compared with the first three months. However, compared with the same period in 2013, before tribunal fees were introduced, this represents a 67 per cent fall.

According to Ingram, the three criteria an employment tribunal usually assesses a case on, and therefore the criteria that employers need to understand and comply with, are as follows:

(1) Were procedures followed?

Employers must act in line with company procedures or, if they did not have any procedures in place, act in line with guidelines set out by the Advisory, Conciliation and Arbitration Service (Acas).

“A manager can be correct to dismiss an employee but if they did so ignoring their own company’s policies then an award will be made to the individual,” said Ingram

(2) Did the firm behave reasonably?

Managers and owners should calmly consider each action throughout a formal process of dismissal, whilst consulting with professional advisors with experience, according to Ingram.

She urged firms to ask themselves: “Would someone outside looking in consider this action to be reasonable?”

(3) Balance of Probability

Employees are often under the impression that evidence beyond reasonable doubt needs to be supplied during a tribunal for a dismissal to be enforced. As an employment tribunal is not a law court, this is not the case, and there is no risk of criminal record or imprisonment – all a firm has to provide is evidence that an individual was culpable on balance and that a dismissal should go ahead.

“It might be of value to include this fact in written polices, as employees act under the misapprehension that evidence beyond reasonable doubt needs to be supplied,” Ingram went on to say.

The government launched a review of tribunal fees in June last year, following arguments that the sharp decline in tribunal cases was due to claimants now having to be pay sums of up to £1,200 when making a claim.

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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