Somehow, I’ve ended up on the mailing list of the General Federation of Trade Unions, and it obviously hasn’t offended me enough to make me unsubscribe. This morning’s headline though calls on members to celebrate a hundred years since the ‘Great Strike’ on 1926.
Only a union would want to celebrate a strike 100 years on! Now I’m sure my friends in the union movement (I do have some) will tell me that the Great Strike of 1926 brought about a revolution in worker’s rights etc etc. and they’re probably right, but I’m still convinced that celebrating strikes is a good thing.
Anyway, the headline reminded me of a conversation I had with an employer recently, which went something like this….
“We hired someone, who proved to be utterly rubbish, he was also unpleasant to colleagues, and despite help and coaching we saw no improvement and we failed his probation, there was no appeal. A few days ago, we got a letter from a trade union saying we had discriminated against him on grounds of his disabilities, and suggesting we have a meeting. What do we do?”
It turns out the probationary employee had ADHD (we see this increasingly often) and the Union are clearly using this as an angle to get around the existing -2-year rule (the 2 years necessary to claim ordinary unfair dismissal until Angela Rayner gets her way and scraps it altogether (next year)).
So….in the face of this claim, what would I advise the employer to do?
Don’t panic
Don’t panic, would be my first piece of advice, nothing will happen quickly, there is no burning bridge and we don’t have to make a final decision today or tomorrow….the process of bringing a claim takes months, and there’ll be plenty of opportunity to establish the strength of the employee’s case (‘Complainant’s’ case) and the employer’s response (‘Respondent’) in coming weeks.
Assess your risks
The union would have given some basis for the Claimant’s claim. Now’s the time to have a cool-headed look – did you know this employee had protected characteristics (PCs)? What was the reason for the probation failure? Could the PCs have had any bearing on the reason? A good quality HR outsourcing company like Omny HR would risk-assess this for you.
If there are risks, it may or may not be too late to mitigate them, or there may be other factors that would indicate that even if the PCs were taken into account, the employee would have been dismissed anyway.
Check your business insurance
You may find your business insurance includes indemnities against tribunal costs and awards – it’s worth checking.
Just because you have this though doesn’t mean you’re off the hook – defending the case can still take a lot of your time, and you should make sure that your insurer is covering all the costs (legal representation and any possible awards should you lose the case) or, if not, what the exemptions are.
Generally, I’m not a fan of ‘litigation insurance’, it often causes more problems than it solves, and if used pre-emptively most employers find the advice, e.g. on how to dismiss an underperforming employee, to be so risk averse as to be practically useless.
The one time it might be useful though is the ‘litigant out of the blue scenario’, so it is worth checking, and if you are insured, liaising with the insurer on next steps (including those I will describe below).
Don’t feel you have to commit to a meeting
Some would say that best practice suggests hosting the union for a meeting, but my personal counsel is not to, unless there’s a good reason. Union negotiators may try and use the meeting as a ‘fishing expedition’ to gather further evidence to support a case that may or may not have merit, or they may simply try to frighten the employer into making an offer.
In this case the employee has been dismissed already, and so may not be subject to internal procedures, and if the union isn’t recognised by the employer, they’re not in the position of being able to demand a meeting either – it’s entirely the choice of the employer.
Although I’ve said the employee ‘may not’ be subject to internal procedures, this should be checked – if the employer has a written probation policy there may be some reference to dealing with complaints from ex-employees, but such references are more likely to be found in the grievance procedure.
Assuming there is no enduring commitment to hear a complaint from an ex-employee, a polite, thanks but no thanks’ acknowledgement (Omny HR would draft for you) would stimulate the next steps, if indeed there are any.
You may hear from ACAS
Prior to submitting an ET1 (see below) the Claimant will have to contact ACAS who will offer the chance to engage in ‘Early Conciliation’. If they agree, it may be (subject to the risks) worth engaging in this to find out what the Claimant is seeking by way of a settlement – if it’s within the realms of reasonableness, there may be a deal to be done that could save a lot of time and hassle later.
As a general rule of thumb, if the Claimant stipulates a settlement amount it’s usually safe to assume that they would take less. If the risk of successful litigation is perceived to be low, the employer may decide to reject a settlement offer outright and challenge the ex-employee to take the matter further. This normally marks the point where a Claimant’s costs start to accrue, and hopeful claims will tend to fade away at this point.
If risks suggest a negotiation is appropriate, Omny HR would manage this for the employer, and if a settlement is agreed during ACAS early conciliation, this would be captured in a legal agreement called a COT3, drawing a line under the action and preventing the Claimant from raising further claims.
Even the COT3 is not as straightforward as it might seem – while settled agreements can be very brief, in most cases a more comprehensive agreement will be necessary to stop the employee settling some claims, but still being free to bring others – again this is a job for our HR and Legal teams.
Not settled? Wait for the ET1
Assuming Early Conciliation isn’t agreed, the next step is to wait for the Claimant’s ET1.
The ET1 is the form the Claimant (or their representative) must submit to the tribunals service to bring an employment-related claim. They (currently) have 3 months from the end of their employment to do this (the government is intending to increase this to 6 months).
The ET1 should be a comprehensive summary of the main components of the Claimant’s case, together with a statement of losses, i.e. what the Claimant is seeking. From the employer’s perspective it is the first time we would expect to see a comprehensive breakdown of the claim, and this may lead to a rethink if the perceived risks are heightened as a result.
A good ET1 takes time to prepare, and time is generally money where employment litigation is concerned. Unlike other Courts, employment tribunal costs and legal representation costs are not normally attributed to the losing party, so half-hearted claims will generally have fallen away before this point is reached – no ‘no-win-no-fee’ lawyer wants to waste time on a case they’re unlikely to have any chance of winning, but trades unions (many have in-house legal teams) may press on in the hope the employer will blink first.
Waiting for the ET1 then is sometimes a tactical decision, forcing the Claimant to play their hand, increasing their costs and enabling a more comprehensive risk assessment for the employer…though that said, we’ve seen some awful ET1s allowed through by the Tribunals.
Time is of the essence…but it will take a lot of it
If the decision to proceed with a defence of the Claim, the employer should be aware that it could take a year or more to progress to the hearing.
For that reason, we suggest that employers commit the time early to creating a summary timeline and to collate key witnesses and information. Most of this will be required for the ET3 anyway (the employer’s response to the ET1) but it will certainly be easier to record all the information now rather than scrabbling around for it in a year or more.
Settlement remains a possibility right up to the day of the hearing
While it’s true that settlement can be agreed even as late as the morning of the hearing day, remember that the Claimant’s legal costs will have gone up a great deal by then (as will the Respondent’s) and they will expect payment of these as part of a settlement deal.
For this reason, my advice would be to consider settling a case early if it seems that there is a genuine vulnerability. Employers don’t want to gain a reputation for settling every claim against them, as it just encourages more claims, but resisting a claim that an employer knows they’re likely to lose is bad economics – defence costs can run into tens of thousands of pounds, and as tribunals are public forums, reputational damage can happen too.
Never fight a claim on emotional grounds
My last tip. Time and again we’ve dealt with employers who feel compelled to fight until the end, not because the risk is low, but because they have an unerring belief that they are being wronged.
Sometimes common sense prevails, and sometimes it doesn’t.
I remember advising a client’s CEO to settle a case that presented real risk of a tribunal loss. He refused ‘on principle’.
Ignoring my advice he appointed a London law firm, who appointed an employment barrister, and I was summoned to the first meeting to hand over the case.
We sat in a rather nice office off Trafalgar Square, the lawyer, the lawyer’s assistant, the barrister, the CEO and I. The CEO talked and talked and talked, enthusing over the injustice of the claim against his company. Back then I estimated the combined time of the legal folks in the room amounted to about £1500 per hour.
And so, as he talked (and talked and talked), they listened and listened and listened. This was the first of several meetings. Lawyers charge by the hour and a talkative client will rack up bills at an alarming rate of knots. Meetings with lawyers are business meetings, and it is wise to rapidly and succinctly get to the point.
This CEO, unfortunately, was utterly incapable of succinctness, and his rambling verbosity, combined with a vastly over-estimated sense of injustice did not bode well. I left the meeting fearing the worst.
A month or so later the CEO, in the face of legal bills now well into 5 figures, settled the case, something I advised him to do a month, and tens of thousands of pounds, earlier.
HR support from Omny
Our combined payroll and HR outsourcing packages provide a bank of support hours which can be used for advisory purposes, or to prepare to defend an employment-related claims. Our HR team has vast expertise of assessing claims, and of advising employers on the application of fair and robust HR procedures.
