Employer’s legal protection is a worthwhile investment

When employers get together talk often turns to the issue of employment tribunals and the issues that can land an employer before one, with the potential for a big hit if, as often seems to happen, the members of the panel give an employee the benefit of the doubt. While rules have been tightened to take out some claims based on little more than nuisance value, and the hope of a pre-tribunal settlement, the cards are still stacked in the employee’s favour. Even if they have no case the time, effort and cost – particularly of legal fees to oppose a claim – can be substantial.

The grounds are many, from discrimination through maternity and paternity situations to sexual or other forms of harassment, which may be by another employee. Defending this is about having sound paperwork, a good evidence trail and records. Absence of these is seen as evidence of failure on the part of the employer. That can lead to the loss of a weak employee case, leaving the employer feeling they’ve been harshly treated.

The problem for many farm businesses is they’re small and don’t have the resources bigger companies have to keep up with legislation. When things go wrong the bills for legal and/or accountancy advice run up quickly. Judgements and tribunal outcomes are based around process and procedures, meaning a person can win a case because the employer hasn’t handled these correctly. Speaking to those who’ve lost cases, they all say that with the benefit of hindsight they wish they’d taken better advice at the outset.

A cost-effective way to do so is to join an organisation that offers that advice. For small businesses one of the best is the Federation of Small Businesses (FSB). It offers legal advice for employment issues and tax investigations, 24 hours a day. This applies to all events that could have legal consequences, from health and safety to how to handle any employment situation. Also available are employment contracts. You’ll have someone on your side to give advice. This is important, since where things can go wrong is how something is handled, even if someone is guilty of a gross misconduct offence, such as theft. Acting with a hot head rarely works well if the decision is challenged before a tribunal.

Don’t assume the employer is always right; some behave badly and their employees then deserve the awards tribunals give. But, in many cases there’s a sense that the outcome isn’t a fair interpretation of the facts and has been over generous. The advantage of specialist legal advice is that you have someone who can answer the question: is it better to go to a tribunal and fight, or to offer a settlement, known as a compromise agreement, to make the case go away?

This is a balance between the cost of fighting a case and cutting your losses without having to go to the trouble of producing the paperwork the tribunal will want. If it goes beyond that, on the strength of the legal advice whether or not to fight a case, legal protection applies to cover costs, but not the settlement if the case is lost. The same applies with cover for a tax investigation.

This is really a form of insurance and it can be bought commercially or via a body such as the FSB. Its fees are based on the number of employees a business has, but in round terms for up to 10 employees the fee, including an initial registration charge, will be below £250 a year. That is allowable against tax as a business expense – and a very worthwhile one it could prove to be in the increasingly litigious age in which we all now operate.

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