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Employment Tribunals don't affect small businesses .... do they?

ARTICLE ORIGINALLY PUBLISHED MARCH 2007

Client Question - I have read some alarming articles about large financial awards to staff at Employment Tribunals, but I've never heard about a shop being taken to Tribunal. Isn't it just bad employers who end up at Tribunal?

In 2006 176,000 employees took their employer to Tribunal. I am dealing with 5 cases at the moment for clients, and almost universally employers tell me that they cannot believe that their employee, whom they have treated so well, has rewarded them by going to Employment Tribunal. You must remember that an employee will often have an entirely different perspective to you, the Employer /Owner, and believe that they are only persuing their rights. If they have lost their job or wages, there is even less reason to retain any loyalty. Small businesses has no special reason to be exempt from Tribunal cases. In fact this sector is largely made up of small employers with limited knowledge of personnel practice. Many staff do not have contracts of employment and/or disciplinary procedures, and of greatest significance the workforce is largely young and female.

The Law

All employees including temporary and those on fixed term contracts can go to Tribunal to claim unfair dismissal after 12 months service.

Employees, even applicants for jobs, do not need any length of service to go to Tribunal if they claim to have been subject to any form of discrimination.For example a receptionist who feels she failed her probationary period because the salon owner became aware that she was pregnant could claim sex discrimination.

Helpful Hints

It may seem obvious, do not make decisions about your staff based on what you feel is right, or even fair. The legislation gives employees basic rights but the employer is still free, in many areas, to decide their terms and conditions for their business. I have written manytimes that most employers lose because they do not have good quality dosumentation. Even more frequently their rules and procedures arent written.

In short you should:-

  • Have a contract of employment that bot you and your staff understand.
  • Have a disciplinary and grievance procedure which is right for your salon.
  • Have written workplace rules.
  • Recruit and select staff using objective criteria and keep a record of your decision.

Tribunal Cases in the Beauty Industry.

I dealt with all of these cases.

Case 1

A salon was failing to achieve its targets and the owner felt that they could no longer afford to keep the manager who did not carry out treatments. This was a reasonable conclusion. The manager was advised of the decision and this was confirmed in writing.

However, legislation requires that employees have a right of appeal against decisions to dismiss. This is a clear example where the failing was only one of process.

Recent legislation allows Tribunals to award an additional 50% when employers havent followed the three stage disciplinary procedure.

The former employee claimed £10,000 at Tribunal.

Case 2

After a very heated arguement, which involved a Therapist verbaly abusing the salon manager and a client, the therapist was told to leave and not come back. The following day, after she had taken advice, the manager invited the therapist to attend a disciplinary hearing. However, it was too late. The therapist realised the likely outcome of Employemnt Tribunal would be dismissal. She, therefore, wrote to the manager indicating that she had already been dismissed (unfairly as there had been no disciplinary hearing) and would take the case to tribunal.

Case 3

A Therapist resigned and gave a weeks notice. The employer recovered a weeks leave which the employer had taken and £400 training costs from the final salary. The employee, at Tribunal, argued that they were owed "lieu" time and that they had never signed their contract. The Tribunal rejected the lieu time arguement as this was quite separate from holiday pay. They were also unimpressed that the employer hadn't signed their contract. If an employee has received it and is accepting all the benefits of it she has therefore implicityly accepted it. However, the sticking point was that the contract only gave a right to recover training costs, it did not specify "from your final salary". The Tribunal ruled that the employers actions represented an unlawful deduction of pay.



Consider the time, money and anxiety that you would face if you were taken to Tribunal. In all of these cases it could have been avoided if the employer had processes, policies and procedures in place which worked for them or, having processed them, sought advice straight away.



David Wright Personnel

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