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Sexual Discrimination: Should businesses take the bullet?

Sexual Discrimination: Should businesses take the bullet?

It was good to see ROLLS-ROYCE successfully defend a claim for sexual discrimination recently, preserving its reputation for excellence.

But with the costs of defending the sexual discrimination claim reported to be £300,000, it raises the serious question of how smaller companies can afford to defend this type of claim – especially when the maximum a tribunal can order a claimant to pay for the employer’s legal costs is £10,000.

Sexual Discrimination claims more likely than ever

Worse still, recent changes in the law and the economic climate have given employees even more reason to use the discrimination route, including sexual discrimination when they feel unfairly dismissed.

Firstly, changes to the law now mean that most staff you employ on or after 6th April 2012 will have to be employed for two years before they can claim for unfair dismissal or request a statement of reasons for dismissal.

Previous to this change they could make a claim after only one year’s service. So it is no surprise that this will encourage those employees with less than the required service to bring a claim for discrimination, including sexual discrimination, as an alternative to unfair dismissal.

Secondly, the poor economic climate means there are far fewer jobs around, so if someone is dismissed they may feel they have nothing to lose in pursuing a claim that could bring in a valuable lump sum in strained times.

So what can you do if this does happen?

You really do have to consider whether you can afford to defend a discrimination claim. Every business likes to preserve its reputation, but deciding whether to go to court is more than a matter of balancing economics against principle.

Defending a discrimination claim can be very costly in both financial and human terms. A variety of your staff could be called to the tribunal as witnesses and the resulting stress can affect both their productivity and morale.

As an alternative to court, you might want to consider an ACAS settlement. Or you could draw up a compensation agreement that provides a sum to the employee in return for their agreement not to pursue this or further claims against your business in future. You can also add in a confidentiality clause stipulating that they not talk about the matter again.

So how can you prevent claims in the first place?

You can minimise the risk of discrimination claims by having robust equal opportunity, discrimination and harassment policies and ensuring they are communicated to all employees. Make sure there are clear channels for complaints and that they are dealt with promptly by properly-trained managers. Also, remember to keep a balance, as the accused is still innocent until proven guilty.

If you have put all reasonable steps in place to avoid discrimination in your workplace, then an employee can be personally liable, both financially and legally, if they have discriminated against another member of staff.

For a free confidential chat on discrimination claims, including sexual discrimination claims, contact our Employment & HR team on 01332 340 211.

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