Human Law Ezine - September 2010
Protect your business from constructive dismissal claims
As mediators and employment solicitors we are seeing a real increase in constructive dismissal claims and that’s bad news for employers as they are costly to defend and disruptive to manage.
There are some high profile (and expensive) cases of constructive dismissal which demonstrate how serious it can be when organisations get it wrong. Kevin Keegan was awarded £2 million in damages and his claim for constructive dismissal upheld against Newcastle United after he resigned his position in 2008. Claims have been raised by everyone from cabin crew managers leaving their job because they were instructed to recruit only ‘young, single and slim’ air stewardesses to teachers, sales reps and high flying bankers. No industry seems to be immune.
Constructive dismissal rising
There seem to be two key reasons why constructive dismissal is on the increase. The economic environment has made the workplace a more difficult place meaning that firms are under stress and facing a tough time. This can lead to poor management decisions and a failure to follow normal personnel management procedures. Redundancy programmes are implemented without proper consideration for the legal rights of employees and the penalties faced for getting things wrong. Staff are put under pressure in such a way as to cause antagonism and resentment.
The second reason is that employees are more willing to bring a claim and are opting to get legal representation to improve their chances of winning bigger awards. Maybe this is as a result of our more litigious society and consequential of the number of no-win, no-fee solicitors positioned to take on such cases? Whatever the reason employers need to protect themselves against such claims.
Protect your business from claims for constructive dismissal
These steps will help prepare and protect your organisation:
- Practice employee engagement - Those firms which have good employee relations tend to be in a stronger position for resisting Tribunal claims as they have better relationships with employees and can negotiate out of any difficulties. Being able to demonstrate a record of good employee relations also undermines the legal prospect of the claim succeeding.
- Keep the dialogue open – The temptation when things are going wrong is to cut off contact with the employee in question or cut them out of decisions. Don’t! Keep talking and try to resolve issues.
- Offer employee coaching, counselling and support – Firms which provide employee support programmes are in a better position than those that do not and have less risk of a legal claim being made against them.
- Control performance management - Do not be over zealous here. One of the issues of performance management is that if it upsets a member of staff, it can lead to a grievance made against a manager. The key thing is that managers have good written processes and records in place to show that they have been fair.
- Be fair when disciplining staff - Ensure that any form of disciplinary action is fair. Do not take steps which can be criticised later. Make sure you have procedures in place, that managers and supervisors are trained and understand the procedures and that they are followed. Keep records. All of this helps firstly prevent a claim but also with defence, if it comes to that.
Clarifying constructive dismissal
An employee can make a claim for constructive dismissal if they feel ‘forced’ to resign due to the behaviour of their employer.
In essence if an employee could show the company had committed a serious breach of contract which left them with no alternative but to resign they may have grounds for a claim.
Common examples of constructive dismissal are:
- Failing to support managers in difficult work situations.
- Harassing or humiliating staff, particularly in front of other less senior staff.
- Victimising or targeting particular members of staff.
- Changing an employee's job or terms and conditions without consultation.
- Changing an employee's job location.
- Falsely accusing an employee of misconduct or of being incapable of carrying out their job.
- Excessive demotion or disciplining of an employee.
If you are worried about a potential claim for constructive dismissal the secret is to act quickly. Take expert legal advice and consider whether mediation might be a way to open up a dialogue with the employee in question before things go past a point of no return.
To take advantage of the telephone employment dispute assessment offered by Human Law Mediation call Justin Patten on 0844 800 3249 or email Human Law Mediation here.