Tribunal Award Increases Sound An Alarm

With the start of the new financial year on April 6 2018 came increases in the maximum basic awards that can result from employers dismissing staff unfairly. It has also introduced what could become potentially uncapped awards for claims such as discrimination and whistle-blowing.

There has been a rise in the maximum total award for unfair dismissal, comprising the maximum unfair dismissal compensation, plus the maximum basic award, from £95,211 to £98,922. Employers, often operating in intense environments where cases can be brought against them for a variety of reasons, now face more liability risk. Cases can be brought because of non-compliant behaviour by employees, and not just the employer. Employers’ Liability insurance (EL) is a legal requirement for businesses in which more than one person is employed. It protects the employer in cases where a claim results from an employee’s workplace accident, or where the work an employee does leads to them becoming ill. A fine of up to £2500 per day can be incurred for every day an employer operates without EL cover and cover of £5m or £10m is the norm. Find out about commercial insurance here However, protection for cases relating to unfair dismissal and other issues that result in an industrial tribunal is not covered by EL insurance. These eventualities need to be covered by Employment Practices Liability insurance. This provides protection against damages, including those awarded in cases of injury to feelings, settlements and defence costs. Legal costs are also typically covered, along with the cost of wages between date of dismissal and the date of judgment, if the employer has to reinstate their member of staff. Some policies also cover breaches in restrictive covenants and instances where a business’s operating licence could be suspended, altered or revoked. This can provide peace of mind in a world where employment law is increasingly complicated. Even unfounded allegations of unfair dismissal or harassment can lead to significant legal costs being incurred. If you recognise the risks employers face, and require competitive EL insurance, please get in touch with us.