Employment tribunal insurance – benefit, or barrier to progress?

myHRdept founder, Bill Larke

Employment tribunal insurance – is it worth it?

I’ve just come off a call to potential new client, where I’ve dealt with (for probably the 200th time this year) the question: “Will you cover our tribunal losses is we lose a case?”

I’m very well aware that there are insurance products out there that do this, but what they also universally do, is tie the employer’s hands so that effectively they can’t deal with issues that need to be dealt with, or if they can deal with them, they face so many multitudinous stages that they may well lose the will to see the process through. I’ve also heard stories of employers being refused cover for making minor alterations to agreed text in letters.

No employer, in my humble opinion, should regard an insurer’s liability as more important than the efficiency of their own organisation. There is process to follow of course, but a commercial HR service should, at its core, provide solutions-based advice to achieve an employer’s objective, with a level of risk the employer is happy to live with. This is a message I gave strongly to our HR team when we had our full day team development session last week, and it’s an important consideration for any employer to bear in mind – employment law matters are rarely dealt with without any risk at all – but is it better to take no risk to not deal with a situation, than to be decisive and fix the problem, with a managed level of risk?

How likely are expensive employment tribunal proceedings

The vast majority of myHRdept clients we work with would rather prioritise dealing with a problem than deferring it. Tribunal cases have increased in recent months, that is not in dispute, but despite that they are still rare, and if an employer is unlucky enough to receive one, it’s even rarer for them to progress to a full hearing. Many claims are withdrawn by claimants in the course of proceedings and, where there is a known risk to the employer, an economic settlement can normally be negotiated further down the line. The reality is that legal costs normally outweigh tribunal awards, and by having a competent legally experienced HR partner like myHRdept on hand, these costs are unlikely to materialise. So insure it, and do nothing (quickly), or deal with it. Those are the choices.

HR support services from myHRdept

Included within all of our HR outsourced support packages is a bank of support hours to help with a wide variety of HR issues, from case management to claims management. Our HR support packages for employers also include staff handbooks and contracts of employment, larger packages include bespoke policies and complex contracts (Director’s service agreements, NED letters etc.)

If you’re thinking of outsourcing your HR or employment law needs, why not contact myHRdept? Call us on 01628 820515, email us at enquiries@myhrdept.co.uk to discuss your requirements, or contact us via our website and we’ll call you back.

Homepage: www.myhrdept.co.uk

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