My company is facing an Employments Tribunal Action - what now?
If a workplace dispute fails to be resolved, your employee can take you to an employment tribunal to obtain a judgement that is legally binding. Facing an employment tribunal is a serious situation that may result in a considerable financial penalty, not to mention bad publicity for your company if the decision goes against you.
Since February 2017 tribunal decisions are publicly available to view online, and news about your company’s situation may spread. So what exactly is an employment tribunal and what might have caused your employee to take such action?
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An employment tribunal generally consists of a panel with three members - a legally qualified employment ‘judge’ and two lay members, one representing the employer and the other representing the employee.
The lay members will have experience of employment-related issues, and must act in an impartial manner when considering the facts of the case. In some instances the judge will act alone, but there are specific actions that require a full panel of three members, one of which is a case for discrimination.
Reasons why you might be facing an employment tribunal
In bringing their case, your employee must pay an employment tribunal fee unless they are earning a particularly low wage, when they might be eligible to receive financial assistance.
Although this is not an exhaustive list of potential reasons, an employee may take you to an employment tribunal due to:
- Unfair or constructive dismissal
- An equal pay issue
- Failing to comply with redundancy legislation, including not paying redundancy pay, and failing to allow your employee time off to look for work
- Working hours issues
- Breach of contract
- Deducting money from wages without the proper authorisation
- Breach of flexible working procedures
- Health and safety issues
If the judgement goes against you
If the judge finds in favour of the person bringing the case, your company may have to pay compensation as well as redressing the issue in question. This could involve re-employing the individual if the action was in relation to unfair or constructive dismissal.
You will also have to pay their tribunal fees, and other expenses incurred in bringing the case. Additionally, if you fail to pay the claimant’s compensation, they can request that you are fined and force you to pay via the courts.
What are the potential financial ramifications of such a judgement?
If the tribunal panel believes you have deliberately and/or consistently breached the claimant’s employment rights, and you don’t appeal or you lose an appeal, your company may be fined between £100 and £5,000 – usually 50% of the compensation awarded to your employee.
The fine must be paid directly to the Secretary of State, and may be reduced by 50% if you pay within 21 days of the tribunal hearing.
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The fact that up to three financial penalties may be applied as the result of an employment tribunal, i.e. compensation for your employee, their tribunal fees, and a fine for the breach of employment regulations, leaves your company at significant financial risk.
Real Business Rescue can help if you are facing an employment tribunal action. We have experience of dealing with adverse financial outcomes, and can offer the guidance you need to overcome an unexpected loss of funds.
We have contacts with over 50 alternative lenders in the UK, and will provide the professional support you need. With 100+ offices stretching from Inverness down to Exeter, Real Business Rescue can offer unparalleled director advice across the UK.