Charities suffering due to costly employment tribunals, says HR director 3

Finance | Gareth Jones | 6 Jan 2011

Charity funds are being wasted because the UK’s employment tribunal system is expensive and encourages false claims, according to the HR director of homelessness charity Broadway.

Writing in The Times, Helen Giles (pictured) says small businesses and charities are “groaning under the burden of complying with employment law that encourages employees to misrepresent themselves as victims of bullying and discrimination whenever their poor performance or behaviour is tackled”.

She reveals that the HR directors of “a high-profile national charity and a well-known international one” told her that no matter how much effort they put into managing staff, some will still put in a claim as “they know it’s likely to be lucrative”.

She adds that for the amount it cost one housing association to successfully fight a case, it could have built three new homes.

There were more than a quarter of a million employment tribunal cases filed in the 2009/10 financial year, an increase of 56 per cent.

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Malcolm Martin
Employee Relations Specialist
Employer Solutions
1 Feb 2012

The difficulty for many charities is that they are run by Voluntary Boards of well meaning people who do not necessarily make good recruitment decisions. Conflict subsequently arises between an appointed manager and the voluntary “masters”. The Board feel they have the right to impose in some way or ways and the appointed manager feels that he or she is undermined. The fall-out can be very costly for the Charity. What is particularly sad is that much of the cost may be borne by donations from those who originally gave money for the Charities prime purpose. We don’t give to charity to compensate dis-affected employees. I have seen several of these cases and, without assigning blame, they are most distressing for that very reason.

In my view Tribunals should have more open regard for the size and administrative resources of the undertaking. Small Charities do not feel they can rely on this statement, from the Employment Rights Act. That is sad because their very limited resources often come from those who give up their time for free and in good faith. That said; Charities might do well to take professional HR advice early on. D-I-Y can be dangerous.

[Reply]

Matt Thomas
6 Jan 2011

Why did the housing association spend so much fighting the case? Their lawyers should have advised them on settling instead of going to court.
I disagree with the opinion that there are too many 'false claims'. Putting in a claim and taking it through a tribunal is a very difficult and stressful experience. It's not a fun experience for either party.
Good employers, including charities, should have good practices in place to treat staff properly in the first place.

[Reply]

D Zaaroura
CEO
North of England Refugee Service
10 Jan 2011
Response to [Matt Thomas]

I agree that cases like this are very stressful.Charities exist to fill in gaps of inadequate or gaps in the support systems. It is very unfair to be looked at or treated as pure business.Small charities do not have retained solicitors to advise them, nor the resources to pay for a settlement. I am afraid offering settlement will be, or could be, a route for compensation or making money from charities.While I agree that sound policies and practices could be the way to avoid this, I think , looking at the well resourced organisations and the daily records show that there is no water tight policies.In short, Charities and small businesses should be dealt with under different categories.

[Reply]

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