HR · 8 June 2016

What Chelsea FC’s Eva Carneiro can teach small businesses about employment tribunals

Eva Carneiro
Eva Carneiro has agreed to drop her sexual discrimination and harassment claim against Jose Mourinho after an out-of-court settlement

A potentially fiery and damaging employment tribunal, pitting Chelsea FC’s former first team doctor, Eva Carneiro, against former manager Jose Mourinho, has been settled this week.

Carneiro is believed to have agreed to a £2m settlement with the football club that formerly employed her, having turned down a £1.2m offer earlier in the month.

By settling her claim of constructive dismissal, the Gibraltar native has avoided giving testimony in court that many anticipated would be highly damaging for both Chelsea and Mourinho. As part of the confidential deal, Carneiro has agreed to drop a claim of sex discrimination and harassment against Mourinho himself.

The settled claim has since seen Chelsea issue a statement apologising unreservedly to Carneiro over the incident that led to her departure.

Mourinho, angered by Carneiro’s decision to run on to the pitch to treat an injured player in the middle of a high-profile premier league match in August 2015, is rumoured to have shouted an abusive and degrading remark at her in Portuguese.

The high-profile case has thrown what some see as a malfunctioning employment tribunal system back under the spotlight.

The sheer length of time it takes for a company to resolve an issue with a former employee, along with the costs involved with defending a case and the disruption caused by inconvenient hearing times, combine to make the process a particular deterrent for small business owners, who of course do not have the resources available to match the wealthiest football clubs.

Figures from the Ministry of Justice released last year showed that the average time taken for a single claim to be processed in 2015 was 29 weeks – 24 weeks less than in the same period in 2014 – whereas multiple-claim cases took on average 196 weeks to be resolved, falling from 205 weeks in 2014. Although the figures are falling, this is time owners of smaller businesses can rarely afford.

The issue of tribunal fees also makes the process more complex for smaller firms. In 2013, the government introduced fees for the first time for people taking their employers to a tribunal. By charging up to £1,260, it was hoped that the number of disgruntled workers pursuing illegitimate or frivolous claims would be capped.

The fee system worked. Since fees were introduced, the proportion of people claiming against employers has fallen by as much as 67 per cent, yet a review of the system is currently underway in Britain following complaints from the Liberal Democrats that such a drastic fall in the number of cases signalled a faulty system – with the fees representing a “tax on justice”. In Scotland, the government has already announced that it will abolish employment tribunal fees altogether, so it remains to be seen whether the rest of the UK will follow suit.

Whether fees are abolished or not, employers face severe sanctions and heavy costs from tribunals. Last year, the British Chambers of Commerce (BCC) revealed that the average cost to employers of defending a tribunal case has gone up to roughly £8,500. In April 2014, the statutory limits on the level of compensation employment tribunals were able to award went up, and tribunals were given the authority to slap penalties of up to £5,000 on employers found to have breached workers’ rights.

Small business owners should still take the necessary steps to avoid the expensive and stressful process of employment tribunals. Problems with staff should be addressed as soon as they arise, rather than left too long, whilst clear employment contracts and consistent communication between employer and employee will help maintain healthy working relationships.

On the back of Carneiro’s settlement, managing director at the Forum of Private Business (FPB), Ian Cass, emphasised that the current employment tribunal system still makes costly out-of-court settlements the most viable option for most company owners when disputes arise.

Cass called on the government to improve the employment tribunal process for smaller firms – requesting that a target of three months be introduced for single claims to be processed and a target of one year for multiple-case tribunals.

He said: “It still takes too long for companies to have issues with former workers resolved. There is already a deterrent for businesses in terms of the fines that can be levied and that the complexity of law only makes it more likely that the best solution is to pay the individual off.”

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ABOUT THE EXPERT

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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