Managing Risk in Dealing with People Issues - Insights & Strategies

Managing risk when dealing with people issues Innes Clark and Alan Delaney MFMac Employment Team 5 June 2025

What we will cover What are the risks? News headlines Employment tribunal statistics Calculating Tribunal awards and the costs dynamic Risk hotspots Case studies Risk assessing/general risk management Q&A

What are the risks? Time spent managing the problem Financial exposure Legal costs Time spent preparing for and at hearing Exclusion from public procurement processes Reputational risks

Headlines Ex-Hammersmith and Fulham Council boss awarded 4.6million London Evening Standard Executive called old fossil by younger boss wins 3.1m discrimination pay out The Telegraph Executive whose job was given to someone else while she was off sick with breast cancer wins 1.2m payout Daily Mail

Headlines Senior Executive wins 2.5 million unfair dismissal payout after being sacked when steroids he was taking for illness altered his mood Daily Mail Online Train companies, including LNER, to pay staff 4.8m after Virgin Trains East Coast email found to breach trade union laws My London Redundant Shearings staff win 4m in legal battle The Caterer

The Employment Tribunal statistics TYPE HIGHEST AWARD MEDIAN AWARD Unfair dismissal 179,124 6,746 Race discrimination 431,768 10,253 Sex discrimination 995,128 16,161 Disability discrimination 964,465 17,218 Religion 20,000 8,500 Sexual Orientation 47,297 26,693 Age 261,949 86,349 Source: Employment Tribunal statistics April 2023 to March 2024

But far from the whole story Statistics do not include claims that are settled before ET hearings (either before or after a claim is raised) The vast majority of employment claims/potential claims are settled Employment lawyers very regularly deal with matters involving six figure settlements

The ET calculation rules Method of calculation of awards Based on actual financial loss in most cases Losses to date of tribunal plus future losses Injury to feelings award in discrimination cases Most unfair dismissal claims capped at the lower of 12 months pay or 118,223 Discrimination claims are uncapped but method of calculation largely the same as for unfair dismissal save for additional injury to feelings award Duty on dismissed employees to mitigate loss The method of calculation means (1) higher earners and/or (2) difficulty finding a new job create higher awards

The cost dynamic Very unlikely that Employment Tribunal will make an award of legal costs in favour of successful party Claimant will need to factor in legal costs BUT:- may be prepared to pay may choose to represent themselves may have free union representation may have legal expenses insurance may have a no win, no fee arrangement

Risk hot spots Uncapped unfair dismissal claims:- Whistleblowing Raising health & safety concerns Discrimination claims Multiple claims for same/similar issue Equal pay Holiday pay Overtime pay

Risk hot spots Collective claims Collective claims Redundancy failure to inform and consult 90 days pay per employee (set to rise to 180 days) No statutory cap on a week s pay TUPE failure to consult and inform 13 weeks pay per employee No statutory cap on a week s pay Bypassing collective bargaining 5,735 per employee

Risk hot spots watch out for Disability related issues including during probationary period / less than 2 years service Whistleblowing including during probationary period / less than 2 years service Flexible working requests Misinterpretation/mismanagement of behaviours of neurodiverse employees

Case study 1 On return from maternity leave Emily, a sales manager at a small company, made a flexible working request to:- work 4 days a week work shorter hours to allow her to collect her daughter from nursery before it closes Her employer rejects the request saying it could not afford for Emily to work shorter hours Emily resigns

Case study 1 Breach of flexible working rules Maximum compensation of 8 weeks pay currently capped at 719 per week Indirect sex discrimination Uncapped compensation Injury to feelings award Based on Thompson v Scancrown Ltd t/a Manors Claimant awarded 184,961.32 Comprised of loss of earnings (past and future), pension contributions, injury to feelings ( 13,500) and interest

Case study 2 An employer intends to make no more than 19 redundancies. A redundancy consultation process begins including offering voluntary redundancy. After an assessment process, 17 employees were given notice that they were at risk of redundancy. The employer makes 17 compulsory redundancies and also accepts 3 voluntary redundancies.

Case study 2 Employer has breached collective consultation rules as voluntary redundancies are included Employer may be ordered to pay each employee up to 90 days gross pay Based on Optare Group Ltd v Transport and General Workers Union Recent employment tribunal claims where protective awards were made include a 1.4m award for 198 employees against Ideal World Ltd Employment Rights Bill includes provision to double maximum award to 180 days gross pay per employee

Case study 3 Autistic employee, 21 years old, senior analyst Less than 2 years service Worked in open plan/hot desk setting with busy walkway close by Employer took issue with employee s disruptive and loud behaviour / perceived employee to be argumentative Tension with line manager line manager believed employee was difficult / high maintenance Employee suffered breakdown at work and went off sick OH recommended changes to working environment Welfare meeting took place but focus was on when employee would come back to work Employment terminated, purportedly due to fixed term contract expiring

Case study 3 Based on Sherbourne v Npower Employer was found to have discriminated against claimant Continuous management failure to understand the employee s disability and implement adjustments recommended by OH Award of 34,500 (in 2019)

Risk assess What is the organisation s potential financial exposure? Does the employee have a protected characteristic? Is the employee a high earner? Is the employee going to take longer than average to find alternative employment due to:- Job market Protected characteristics eg disability / age Some other reason

Risk assess Is there the risk of multiple claims? Is there the risk of damage to employee relations? Is there the risk of damage to customer/client relations? Is there the risk of reputational damage?

General risk management Look to proactively address issues when they start to arise Be familiar with and follow your own procedures Where appropriate consider informal resolution and/or mediation Consider if any reasonable adjustments are needed Be fair and consistent when managing issues Take a solutions-based approach where possible

General risk management Keep good notes and share actions / outcomes Ensure follow up checks take place and recommendations implemented Consider workforce surveys and employee resource groups Implement policies and training programmes across areas of difficulty Involve HR / take legal advice sooner rather than later

Managing risk when dealing with people issues Innes Clark and Alan Delaney MFMac Employment Team 5 June 2025