Employment Practises Liability Cover

BLOG UPDATE (3/09/20):The Coronavirus Job Retention Scheme will come to an end on 31st October 2020. The scheme has covered 80% of the wages of furloughed workers, up to a maximum of £2,500 per month. When Rishi Sunak first announced the scheme in March, he said it would only last until 31st May. But since then, the government have announced two more extensions of the furlough support, meaning businesses can still take advantage until the end of October. Employment experts have warned that withdrawing the scheme could put thousands of jobs at risk. To help prevent job losses the government have promised a new £1,000 bonus for each furloughed worker that is rehired and employed continuously through to January 2021.

Every business should take care of the way it treats its employees, and farms and rural sector businesses are no different. In today’s litigious society, accusations of blame are easily attributed which can lead to investigations by regulators such as the Health and Safety Executive (HSE).

Such investigations can be covered under Rural Protect’s Employment Practices Liability (EPL). This optional cover can be added to the Rural Protect policy and covers wrongful acts arising from the employment process, as well as costs incurred for any investigation.

Potential issues policyholders may face

The most frequent types of claims covered under EPL include:

  • Wrongful termination
    • Discrimination
    • Sexual harassment
    • Health and safety incidents
    • Other procedural breaches.

Rural Protect provides defence when faced with allegations of unfair dismissal, discrimination and sexual harassment from any former, current or potential employee.

There is an any-one-claim limit up to the limit of liability and an excess of £1,500 for each claim for this section of cover. The standard excess will not apply where the advice of the employment helpline/rradar is followed for any matter that may lead to a claim.

Tribunal fees and penalties

The government’s tribunal fee structure introduced in 2013 was deemed unlawful in 2017 by the Supreme Court. Though surprisingly, a new system was not immediately considered. However, The Good Work Plan is aimed to replace it and came into force in April 2020.

As such, the plan’s rights now extend to all workers, not just employees. Increased penalties of up to £20,000 for aggravated breaches of employment law and a ban on employers taking deductions from staff tips are some of the new terms.

Claims Example

Tribunal proceedings were issued against the insured for several claims including race discrimination, breach of contract and for various payments. All of the claims were struck out at a preliminary hearing apart from a claim for victimisation.

The Tribunal ordered the Claimant to pay a deposit in relation to that remaining claim, which he failed to pay. That claim was accordingly also struck out, meaning all claims were dismissed against the insured.

The policy paid the following costs:

  • Solicitor’s fees: £6,639.18
    • Counsel’s fees: £2,359.56
    • Total: £8,998.74

Employment Practices Liability is an optional cover available under Rural Protect. It protects a business when faced with allegations of unfair dismissal, discrimination and sexual harassment.

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