What is Employment Disputes Cover?
Employment Disputes insurance responds to claims for compensation brought by current, former and future employees alleging a breach of their employment agreement, the Privacy Act and/or the Human Rights Act. This insurance covers the costs of such claims, including defense costs. Common areas of exposure include a personal grievance action, a claim for unjustified dismissal or other alleged disadvantage under the Employment Relations Act.
What are some of the employer’s obligations in managing staff and maintaining indemnity under the policy?
The policy is subject to employers making reasonable effort to comply with employment legislation, including by taking and following legal advice.
Following the correct procedures is extremely important when dealing with employment issues, the policy requires that you contact us immediately once you know of a circumstance that could lead to a claim. The Insurer will want you to take legal advice from their approved legal panel.
This avoids the situation where the Insurer believes a late (or no) notification has then led to higher incurred costs, potentially the wrong advice being taken and therefore leads to a different outcome that the Insurer does not agree with. In certain situations, the Insurer may then decline a claim.
Key Q&A
Q. Should I consult a lawyer prior to taking action against an employee?
- Yes. You will not have cover where you have acted without taking legal advice from a practitioner in employment law first approved by your Insurer.
Q. What should be reported as a claim?
- Any circumstance that could give rise to an employment dispute, including for example:
- The intention to institute redundancy procedures or discussions.
- Investigation by the Human Rights Commission or Privacy Commissioner.
- Allegations concerning harassment (sexual or otherwise).
- Proposals to make major changes to employment arrangements.
- Institution of disciplinary investigations.
- Concerns about competence or performance on which you propose to take action.
- Any contact from the Mediation Service.
- Or receipt of any claim or grievance or threat thereof by or on behalf of any former, current or prospective employee.
Please contact your AIB Adviser for further information about Employment Disputes cover and/or drop us an email to [email protected] and we will get in touch.
