Dealing with workforce disputes

The abolition of tribunal fees in 2017 triggered a dramatic rise in the numbers of employment tribunal claims.

Coupled with the increasing focus of HMRC on enforcing the National Minimum Wage and the appointment of Sir David Metcalf as the Director of Labour Enforcement in Jan 2017 and his recent development of the Labour Market Enforcement strategy, organisations need, more than ever before, to ensure they comply with UK employment law. Following best employment law practice and HR process is the key to an organisation meeting its regulatory requirements and avoiding complaints or claims.

What are the biggest risks of non-compliance?

Organisations may face employment tribunal claims from staff, enforcement action from regulatory bodies or both. Below are some examples of areas where claims and investigations can arise. 

Employment claims
Unpaid wages claims (including underpaid holiday pay)
Unfair dismissal compensation
Breach of contractual rights 
Discrimination claims – disability, age, race, nationality or ethnicity, sexual orientation, religion or belief or gender, gender reassignment, marriage and civil partnership and pregnancy and maternity
Whistleblowing detriment or dismissal protection
National Minimum Wage compliance breaches
Equal pay

Misuse of workforce personal data

Regulatory investigations
HMRC can fine organisations for failing to pay National Minimum Wage and National Living Wage and they can also be publicly named and shamed.  

The Information Commissioner can fine organisations for mishandling workforce personal data and failing to comply with the GDPR.

Employment Tribunals can also order a financial penalty against an organisation which has breached workers’ rights where there are ‘aggravating features’. 

Tribunals are more likely to find that an employer’s behaviour in breaching the law had ‘aggravating features’ where:

  • the action was deliberate or committed with malice; and/or
  • the employer had repeatedly breached the employment right concerned.

The government is looking at significantly increasing these penalties from £5,000 to £20,000 per claimant.

What can you do to protect yourself?

The best way to protect your organisation from a successful claim and to reduce complaints is to get your employment contracts and HR processes legally compliant and fit for purpose. 

Ensuring you have the right working contract with the essential requirements and protections for your organisation is the first line of defence.

Applying best practice HR processes and procedures may avoid workforce disputes arising in the first instance. In the unfortunate event they do, good HR practice will give you a solid platform from which to defend a claim or resolve a dispute before a claim is brought. This includes embedding policy, procedure and mandatory training in an organisation which can be evidenced should a claim arise.

When a complaint emerges your legal and HR advisers or team members should work collaboratively to address the risk and plan a strategy to protect the organisation.  

Download our guide to managing employment claims here.

What to do if an employee brings a claim against you

Initial actions to consider if an employee brings a formal tribunal claim against you:

  • instruct an employment lawyer promptly – you have 28 days to file a defence;
  • start gathering all documentation relevant to the claim;
  • get an early assessment of risk from your employment lawyer so you can weigh up your options;
  • engage with the ACAS conciliation process on an informed basis and be open to other commercial solutions ;
  • identify your key witnesses; and
  • if you have an employment tribunal hearing date, diarise it and make sure your witnesses are able to attend.

Successful claim defence is built on teamwork between lawyers, HR professionals and business leaders.

What to do if you are investigated by HMRC for a NMW related issue

  • HMRC – National Minimum Wage investigations: We have a section devoted to the National Minimum Wage on our website here. This will give you all the information about how to proactively manage the risk of NMW breaches, and what to do if HMRC notify you of a NMW investigation.

What to do next

If you have any concerns around employment contracts or if you have a current or potential employment claim, please contact Carolyn Brown.

If you have any concerns about your HR processes and procedures please contact David Gibbens.

Our new forces at work guide has more details on proactive ways in which you can manage workplace disputes.