Trending Claims in Employment Practices Liability
Whilst the main source of Employment Practices Liability (EPL) claims remains wrongful termination issues, the #MeToo movement, has exposed abuse of power and an increased focus on gender pay discrepancies. Both have demonstrated the growing need for EPL insurance.
Written on 27th December 2018
Claims in these areas tend to be expensive because firms have a reputation to uphold and don't want any negative press.
The #MeToo Movement and gender pay gap reporting have also thrown up an unexpected Employer’s Liability Insurance exposure, and a small number of individual claims have been successfully brought for the mental anguish that an employee has suffered as a result of discrimination.
Employer’s Liability cover only applies to the injury suffered, but if the injured party is subsequently unable to work, they could enter a claim for future loss of earnings if they are unable to continue working in the same field.
With equality very much in the public eye, there is the potential for the number of claims to rocket. Group action is a real possibility and the industrial action by more than 8000 Glasgow City Council workers over equal pay in October of this year demonstrates the numbers that could be involved.
Claims management companies are highly likely to spot the potential of this type of claim, which could see a rapid incline in the number of claims reported.
If a flood of claims does materialise, The Limitation Act which puts a time limit of three years on actionable personal injury cases from the time the claimant is aware they have been injured, means we might expect to see the numbers peak around 2021-2022.
Whilst Employer’s Liability policies provide cover for injuries suffered, these disputes can still be very costly for an employer. For example, a £1.1bn bill for historical equal pay claims forced Birmingham City Council to sell off the NEC Group, which includes the National Exhibition Centre and the Barclaycard Arena, and of course reputational damage is a significant threat.
Whist the current focus is on gender, other forms of discrimination such as race, religion, sexual orientation and disability represent growing threats. Indeed, the government’s recent launch of a consultation into ethnicity pay reporting by employers shows there is plenty of appetite to stamp out all forms of discrimination in the workplace.
Employers need to put equality on the Boardroom agenda, make employment practices part of their risk management process and consider adding Employment Practices Liability insurance to their insurance programme. Insurers encourage firms to be proactive on workplace training and suggest that sexual harassment training should be conducted on an annual basis, so that it remains fresh and everyone is aware of the issues. A Diversity Policy should also be considered to include age, race, religion and sexual orientation in addition to gender to help negate any issues arising from all types of discrimination.
If you would like to discuss Employment Practices Liability insurance please speak with your usual Franklands contact.