CLAIMS CORNER

The following is an example of an Employment Defence claim that was submitted under our Commercial Legal Expenses Insurance (LEI) policy. The high claims cost demonstrates the importance of LEI. Without LEI in place, the policyholder could have been liable for high legal fees to defend the claim.

The policyholder owns a business which provides crop protection solutions, and hired a site administrator to assist with onsite tasks. Six years after appointing the employee, a business reorganisation indicated that the position may no longer be required, and the policyholder advised the employee that they may be at risk of redundancy following advice and authorisation from the Legal Helpline. Throughout this restructure, a new position was made available and the employee was included in the selection exercise to fill the position, however a colleague was found to be better suited to the role.  

The employee was therefore made redundant two weeks later, however stated that they felt the redundancy was not justified and brought legal action against the policyholder for unfair dismissal.

The policyholder submitted a claim form to us under their Commercial LEI policy. Our panel solicitor was instructed to defend the policyholder, and following unsuccessful negotiations, the case went to the Employment Tribunal. The case settled in the policyholder’s favour, after the Tribunal declared that the ex-employee was not dismissed unfairly. Legal costs amounted to nearly £20,000, all of which were covered under the LEI policy.

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