No matter how dedicated you are to being a fair and exemplary employer, if you’re in business long enough, you’ll probably be faced with a compensation claim from one of your team at some point. Furthermore, COVID-19 is likely to give rise to an increase in tribunals in 2021 and beyond.
An employee compensation claim doesn’t have to spell disaster for a business. What matters is how the issue is handled.
If you have a robust system in place to process the claim efficiently and with due respect for the claimant, you stand a good chance of resolving the matter without a huge cost to the business’ bank balance or reputation.
The Potential Impact of COVID-19 on Employee Compensation Claims
According to government figures, 9.4 million employees were placed on furlough between 20 March and 30 June 2020. When the scheme ends on 30 April, unemployment levels are expected to rise sharply, reaching a peak of around 7% in the second quarter of this year.
This could lead to a surge in employee compensation claims and tribunals. New data from the Ministry of Justice revealed that the number of single tribunal claims in the UK between April and June 2020 was up 18% on the previous year – the highest level since 2012/13. It was noted that, “This rise in Employment receipts is likely to continue as the government’s Job Retention scheme comes to an end.”
A number of potential issues could arise as a result of COVID, the furlough scheme, and ensuing redundancies, which means that redundancy planning is one of the most important resources that employees need to access at this time. For example, if a company decides to make all furloughed staff redundant, employees who were put on furlough for childcare or health reasons could submit a claim of discrimination or unfair dismissal, after many finding out online when you can claim unfair dismissal, and in which cases it is acceptable to do so.
Types of Employee Compensation Claim
There is a long list of potential reasons why your business could face an employee claim, including (but not limited to):
- Unfair dismissal
- Breach of contract
- Discrimination
- Redundancy pay
- Working hours
- Equal pay
- Unauthorised deductions from wages.
Several new claims could begin to materialise as a direct result of the pandemic, for example:
- Breach of Contract – hastily made government guidance lacks clarity in some areas, and employers could unintentionally have breached an employee’s contract.
- Selection for Furlough – some employees may feel aggrieved about being furloughed, others might be angry at not having this option. There is no clear guidance on how employers should choose who to furlough.
- An Inadequate Redundancy Process – how have employees been selected for redundancy? Have the proper procedures been followed?
- Health and Safety Issues – employees who felt forced to return to work or those with existing health conditions could claim for being placed at unnecessary risk of transmitting the virus.
Due to the rapidly evolving nature of the pandemic, its changing impact on business operations and hastily made government guidelines, it is likely that employees could bring a wide range of complaints to a tribunal.
How to Manage Employee Claims Effectively
All business owners should be prepared for the possibility of an employee compensation claim to ensure that the matter is managed fairly, legally and in a manner that minimises any damage to the organisation.
- Establish Effective Reporting Processes – every employee should be aware of the company’s policy for reporting accidents, injuries and concerns. There should be an established process for raising any issues and seeking support. Diligent reporting will not only reduce the likelihood of employee compensation claims but it will also demonstrate a commitment to fair and ethical practice if a matter does go to an employment tribunal.
- Investigate Workplace Incidents – if an incident occurs in the workplace, for example, an accident, illness or altercation between staff, there must be a thorough investigation that explores what happened and how this could be prevented in the future. This will reduce the number of claims and provide ready access to key information during employee tribunals.
- Implement an Efficient Claims Management System – there should be an easily accessible claims management process that allows employees to make a claim independently. Employees should not feel pressured to speak to a specific member of staff or be put off by a complex and time-consuming process. Intelligent claims management software can be used to automate the entire process and allow employees to track the progress of their claims.
- Communicate with the Claimant – keeping an employee informed and up-to-date with the progress of their claim is an important step of effective claims management. Automating the process makes sure that nothing is missed and that the employee feels in control of their claim because they can log in and monitor progress whenever they choose.
Businesses must be prepared to face employee compensation claims – now more than ever. Diligent preparation and prevention can reduce the number of claims and minimise any damage to the business if a claim is made. Establishing effective policies, procedures and processes now and investing in fit-for-purpose technology will pay dividends in the long term.
