In the wake of the recent revelation that employment regulation has cost UK businesses £70 billion since 1998, now seems like a good time to review the impact of employment legislation in Guernsey

It has been 10 years since the Employment Protection (Guernsey) Law 1998 – more commonly known as the Unfair Dismissal Law - came into force here and three years since we introduced legislation prohibiting sex discrimination at work. The common perception is that these laws have created an employee’s charter and that any employer taken to Tribunal might as well just sign the cheque before the hearing starts. With the unfair dismissal award standing at a possible 6 months’ pay and the sex discrimination award at 3 months’ pay, it can be very useful for both sides to know if the general perception is true before the hearing starts.

Looking back to when it all began, figures show that 23 complaints of unfair dismissal were lodged in 1999. This compares with 52 cases lodged so far this year, an increase of more than 100%. On the face of it, these figures suggest an upward trend in litigation. Digging deeper, of the cases lodged in 1999, almost 70% were referred for hearing. This compares with only 5% of the cases lodged this year being referred to Tribunal. Maybe, despite the increase in cases, we are becoming less rather than more litigious? Certainly the Employment Relations Service reports an annual average of 70% of cases being settled by conciliation.

Another interesting trend is the rise in the number of claims for constructive unfair dismissal. There is a ‘constructive’ unfair dismissal when an employee feels they have no choice but to leave their employment because of their employer’s actions, for instance where an employer cuts wages or demotes an employee without their agreement. An alternative way of describing this situation could be an “enforced resignation”.

In the first 5 years of the Unfair Dismissal Law being in force, there was on average only one constructive unfair dismissal claim each year. Since 2005, the number of constructive dismissal cases has increased year on year, with these types of claims accounting for a third of all unfair dismissal complaints in 2008. This year, two out of the three constructive unfair dismissal claims have centred on allegations of bullying by senior management, a worrying trend. Both these claims were upheld and the employees each received the maximum award (£13,500 in one case and nearly £11,000 in the other).

Another trend identified by the Employment Relations Service is the increase in claims relating to unfair dismissal on the grounds of redundancy. Of the total number of unfair dismissal complaints lodged since 1 January 2009, almost 20% relate to surprising against the backdrop of the global economic crisis. Although there is no entitlement to a statutory redundancy payment in Guernsey, the Unfair Dismissal Law allows an employee who feels that the redundancy process has been badly handled to bring a claim of unfair dismissal. If successful, the claimant will be entitled to an unfair dismissal award, not a redundancy payment.

And what about the sex discrimination law? With all the recent talk from the UK about the gender gap and pay differentials, how (if at all) does this translate into Tribunal cases in Guernsey? Since sex discrimination at work was outlawed by the Sex Discrimination (Employment) (Guernsey) Ordinance 2005, 16 sex discrimination complaints have been lodged, averaging out at 4 each year. Of these, 3 cases have been referred to a Tribunal hearing and 1 is still on-going. None of the cases heard by the Tribunal to date have related to complaints about differences in pay.

And now to the nub of it. Is the general perception true? Does the employee always walk away from Tribunal proceedings with a fat cheque? Or does an employer faced with a claim have a reasonable chance of defending a case?

In the last 3 years, of the 29 cases which have gone to a Tribunal hearing, 15 have been found in favour of the employer and 14 in favour of the employee. Of the three discrimination cases which have gone to a full hearing, the Tribunals have rejected all claims of direct and indirect sex discrimination. The figures show the outcome is fairly evenly balanced. Any perception that the law favours the employee is simply not borne out by the facts. procedurally unfair redundancies. This compares with a static figure of 10% in 2007 and 2008. This increase is perhaps not surprising against the backdrop of the global economic crisis. Although there is no entitlement to a statutory redundancy payment in Guernsey, the Unfair Dismissal Law allows an employee who feels that the redundancy process has been badly handled to bring a claim of unfair dismissal. If successful, the claimant will be entitled to an unfair dismissal award, not a redundancy payment.

And what about the sex discrimination law? With all the recent talk from the UK about the gender gap and pay differentials, how (if at all) does this translate into Tribunal cases in Guernsey? Since sex discrimination at work was outlawed by the Sex Discrimination (Employment) (Guernsey) Ordinance 2005, 16 sex discrimination complaints have been lodged, averaging out at 4 each year. Of these, 3 cases have been referred to a Tribunal hearing and 1 is still on-going. None of the cases heard by the Tribunal to date have related to complaints about differences in pay.

And now to the nub of it. Is the general perception true? Does the employee always walk away from Tribunal proceedings with a fat cheque? Or does an employer faced with a claim have a reasonable chance of defending a case?

In the last 3 years, of the 29 cases which have gone to a Tribunal hearing, 15 have been found in favour of the employer and 14 in favour of the employee. Of the three discrimination cases which have gone to a full hearing, the Tribunals have rejected all claims of direct and indirect sex discrimination. The figures show the outcome is fairly evenly balanced. Any perception that the law favours the employee is simply not borne out by the facts.

We are indebted to the Employment Relations Service for its help in compiling the figures and identifying the trends referred to in this article.