The risk management approach to employment tribunals
It is normal now for organizations to assess the risks of many aspects of their activities. Under Health and Safety laws, this is effectively a statutory requirement, but prudent organizations adopt the same principle of risk assessment and reduction in other fields. Many judge managers accordingly by the results they achieve. Insurance claims for damage arising from faulty products or services are often treated as avoidable business costs. Therefore, it makes sense to treat claims arising from proven wrongful dismissal in the same way.
In a large organization, a manager is not doing their job properly if they land their employer frequently before employment tribunals. Their costs are a symptom of inefficient management just as surely as are high levels of ‘scrap’ or business lost through failure to meet quality or service standards.
In a SME-size organization, one tribunal decision going against the owners may be catastrophic. It makes good sense in enterprises of every size to strike a balance between
- the cost of implementing fair, sound, documented employment procedures and
- the potential costs of losing a case before an employment tribunal. Given the unlimited costs of losing an action for, say, unfair dismissal on the grounds of Racial Discrimination, it is unlikely that the balance will ever come down on the side of taking a chance that the unthinkable may never happen.
A glance at the background cases quoted in this resource should convince anyone who still harbours doubts as to the value of acting fairly – and being prepared to prove it.