Change in law putting small companies at risk of unlimited fines

There could be an imminent wave of new disability discrimination claims against small firms, many of whom are unaware of a significant change in the law this Friday. The law states that employers with less than fifteen staff are no longer exempt from legislation that protects employees with a disability.

The warning comes from Croner Consulting, one of the UK’s leading providers of business advice and support, as amendments to the Disability Discrimination Act 1995 (DDA) come in to force on 1 October.

From this date, the provisions of the DDA will catch all employers irrespective of size. This means that employees will be able to claim against their employer if they are treated less favourably due to a disability, or if their employer fails to make ’reasonable adjustments’ in the workplace to prevent them being placed at a substantial disadvantage in their employment.

This is the most significant change in law affecting small employers in recent years according to Richard Smith, HR expert at Croner Consulting, which is part of Wolters Kluwer UK. He is urging those affected to become acquainted with the Act, or they could be facing unlimited fines for disability discrimination.

He says: Owner-managers of small firms are often too busy to keep up to date with changes in employment legislation, but they will ignore this latest change at their peril as disability discrimination is one of the few types of fines where the compensation can be unlimited.

Compensation for disability discrimination is frequently in excess of 100,000 - a tribunal will not be lenient for a smaller firm since the amount of compensation is based on the injustice suffered by the claimant, rather than the employer’s ability to pay.

Croner Consulting is advising employers that the main areas where they could slip up are during recruitment and when dismissing an employee.

Richard says: Individuals can bring a claim even before they commence employment if they think they were not offered the job due to a disability. Employers should make sure they can prove that a decision not to employ them was reasonable on other grounds.

When dismissing an employee who has a disability, the employer must be able to prove that the dismissal was not for this reason.

For example, where an employer is considering dismissing an employee with more than one year’s service who is on long term sickness absence, the employer would have to, in any event, follow fair procedures in order to avoid an Unfair Dismissal claim succeeding.

Where the employee has less than one year’s service, if the real reason for the dismissal is the absence, employers would be free to terminate the employee on notice without risk of a claim - were it not for the DDA.

Richard says: This is where employers can get in to hot water, as the DDA applies irrelevant of length of service. Providing employees can show that they are disabled, as defined in the DDA, they will be able to claim discrimination if an employer has dismissed them for a reason connected with that disability, such as their absence.

We would advise an employer to obtain advice prior to taking any action against a disabled employee to minimise the risk of a fine that could seriously damage their business.

For more information contact:

Nicola Green
Tel: (0191) 244 6637
Email: nicolag@robson-brown.co.uk