UK SMEs witness rapid rise in tribunal costs due to staff discrimination cases
Tribunal costs for UK SMEs are rapidly increasing as staff discrimination cases have rocketed and, with new age discrimination laws now in force, many will be expecting to see further increases during the second half of 2007.
The Employment Tribunal Service revealed that since the age discrimination law was enforced in October 2006, an average of 100 claims a month have been filed and, with awards for these cases being uncapped, many businesses could be facing paying out seven figure sums in compensation.
But it is not just the age discrimination law that businesses seem to be falling foul of. Further statistics from the Employment Tribunal Service showed that the combined cost of race, gender and sex discrimination had increased by 52%, costing the economy £320m in 2006 alone.
Phil Ruse, senior manager at Allianz Legal Protection said: “Although foremost a form of entertainment, Sir Alan Sugar’s firing and hiring process on The Apprentice earlier this year provided a good example of how a company could face a tribunal and how all employers should err on the side of caution.”
“Employers need to be increasingly vigilant about what they say to existing or potential staff, and even bear in mind the importance of ensuring that all staff within the company are compliant with the laws
Phil Ruse, senior manager at Allianz Legal Protection
When Ghazal Asif was fired she was told that 23 years old was ‘very, very young’ – possibly even ‘too young’. If similar comments are made in an actual interview, the interviewee could have made a claim against the company under the Age Discrimination Act.
Ruse added: “Another very recent example of discrimination against staff is the case won last week by Sting’s chef, who was awarded £25,000 in compensation for both sex discrimination and unfair dismissal when she was fired shortly after becoming pregnant.
Employers need to be increasingly vigilant about what they say to existing or potential staff, and even bear in mind the importance of ensuring that all staff within the company are compliant with the laws as paying awards up to thousands of pounds post-tribunals is now becoming a costly business.”
