Are you worried by litigation? Looking through the papers recently we have seen awards of up to £200,000 going to disgruntled ex-employees. That’s a lot of money and it has got people worried, whatever you think of the cases.
Well there is news on the horizon, and some good, some bad. The good news is that the government has announced that in the near future employees who want to take their bosses to a tribunal will have enter into a proper, formal dialogue with their employers before that is allowed to happen. It is hoped that this would cut down on the number of spurious claims.
A recent court decision has also suggested that claims for unfair dismissal will not involve awards for stress and psychological damage. In other words, the spectre of claims spiralling out of control because of ever-growing “distress” claims should have disappeared for now.
Careful though, some believe that this “complaints process” will involve the employer in a considerable amount of paperwork and red tape. In addition, any employer refusing or omitting to go through the process, it is believed, will automatically lose their defence against a claim unfair dismissal.
But whatever the good news, during the past few weeks we have seen an enormous award against motor dealer, and a number of very big payouts to employees who have been mistreated or discriminated against by the employer. And anybody who thinks that they can ignore this growing trend by denying its existence is playing a very dangerous game.
Because the law is demanding more and more from business to ensure that it takes a responsible attitude to its own staff and its customers. And forget the headline grabbing awards, what it is trying to do its balance the overwhelming power of companies, especially the corporate multinationals, with the individual.
Let me put two different fictitious scenarios to you. In the first, I rather improbably get appointed to a senior role with a small group of dealers (you can see why I used the word “fictitious”). Upon arriving I discover that the company has been badly run for many years, the staff are at best badly trained and motivated, at worst incompetent. With the franchises we have, the group should be highly profitable, but it isn’t. The owner is struggling through life because he doesn’t know his only asset, his business, can be unlocked. To cap it all, the manufacturers are threatening to pull out.
In the second scenario, a small rural dealer has a very settled staff. They have their ups and downs, but they love their work. The owner is a proper type who has owned the freehold for years and doesn’t put on too much pressure. Customers quite like them because they know the people, they do their best, don’t charge too much and bend over backwards if they get it wrong. They get plenty of free umbrellas, shirts and jackets when they complain, which keeps them and the Parts Manager happy.
Then the game changes, because they are flip sides of the same coin. Under pressure from manufacturer, a bloke called Guy Liddall is appointed to the board. He changes the company focus quite quickly and all of a sudden all staff are under review, and under pressure.
I could go on, but we have all seen the results. A settled staff becomes the opposite, an under-performing business becomes profitable, but customers may or may not react favorably the increase in prices and the more overtly commercial attitude. Some staff take it personally and a tribunal is the result.
This sort of scenario is played out across the UK every day, and a change in Senior Management, or even worse a takeover, will normally cause this stress. Changes in management cause changes in allegiances, and all the old certainties disappear. And the problem for the new man is difficult to solve. Quite often a relaxed regime writes nothing down, formalises little and Fred, a 16 year workshop controller, is suddenly on a perfromance review and then out the door, with nothing on his file for 15 ½ years.
If it goes to court, you had better be very sure of your ground “You were happy with him for over 15 years, but spent no money on training and now say he can’t do his job. Whose fault is that, and who should put it right?” And from Fred’s point of view they do have a point.
And such cases do not restrict themselves to the small employer, several manufacturers do not need reminding, to their cost, where their industrial relations have been mis-managed in the eyes of the courts.
So what can you do? How can you stay safe out there?
Well, there are no guarantees, because your own employees might just let you down without you knowing it. But even so, there are general principles everyone would agree with, and should adhere to. And some of them might be quite difficult for you to swallow.
First rule, recruit very carefully and very fairly. Check references (only about 40% of you do) to make sure that managers and other staff can do the job they take on. Use job descriptions so that people know how they will be measured and what is expected. Train your staff in what questions can and cannot be asked at interview.
Once people start work, ensure they are inducted properly, and that they know how to report incidents. (One massive award was made to an employee who had been at the company for a week). Write everything down – nothing on the record means no problems to a court, even if everybody knows there were real issues with an employee.
Make sure you know your employment law – ignorance of it is no excuse and the courts are very keen to penalise companies that do not follow good procedures.
And finally – and this can be the most difficult for some of you – be fair. Realise that your company is only as good as your employees and that they have no loyalty to you if you show them none back. Then they at least might stick up for you if someone is trying it on. Good luck.