Labour plan to make directors personally liable if their companies fail to comply with tribunal orders.
The proposal
Labour’s Green Paper makes it clear that they want to introduce tougher penalties on directors if their organisation fails to comply with tribunal orders or if they break employment laws. Labour have provided very little detail beyond this headline but we can assume in the context of tribunal orders that directors will be personally liable for unpaid tribunal compensation.
Labour were also planning to scrap caps on compensation awards which would particularly affect awards for unfair dismissal (some awards such as discrimination and whistleblowing are already uncapped, for example). But, since publishing their ‘Plan to Make Work Pay’, this promise has disappeared.
Practical impact
Without further detail, it’s difficult to know the potential impact of this proposal, but as a starting point, it would be prudent to review your current Directors’ and Officers’ liability insurance to see whether it covers tribunal awards. If it doesn’t, you’ll want to find an insurance solution that does.
Solutions
Take early advice! – picking up the phone to us after the event or when you’re in the middle of an issue or process often means we have to try (if possible) to unpick actions. That means you spend more fees and time taking advice than necessary. If you can encourage teams to tackle issues before they escalate and ensure they take advice in real-time rather than waiting, you can influence better results with fewer fees! Get in touch here if you need our help with a solution to give you this level of support.
