If you are seeking to outsource your HR support services, chances are you will have considered tribunal insurance as essential for your peace of mind. But there are several reasons to rethink this.
You might not even need it. There are many steps on the journey to an employment tribunal, and an employer who has sensible HR policies and procedures in place, and follows them, is at a very low risk of losing an employment Tribunal claim
All your costs won’t be covered. Tribunal indemnity insurance takes various forms, ranging from insurance against all legal and compensation costs arising from a tribunal claim, to just covering legal costs, to covering nothing at all because you didn’t follow the rules.
Insurance companies don’t like paying out. Those HR Service providers with indemnity insurance coverage will often just provide you with telephone guidance and written scripts that you must follow exactly, irrelevant to the context in which you find yourselves. Any deviation from the process will ironically mean that the insurance coverage is invalid
Cases of employees going to a tribunal have fallen. In July 2013 the government introduced a fee system for a claimant to go to an employment tribunal. Additionally in April 2014 new rules were introduced requesting claimants to contact ACAS before going to a tribunal. These factors have resulted in a significant reduction in the amount of claims going to an employment tribunal resulting in claimants seeking to settle out of court.
At HR Initiatives, we focus on how we can add value to your organisation and put your company on the path to ensure your business is legally compliant without the need to go to an employment tribunal in the first place.